Tuesday, April 26, 2005

Social Security issue on the SC's docket

Some time ago there were some rumblings over how privatization of social security might lead to the consideration of private accounts as assets which could raise interesting possibilities during divorce and bankruptcy proceedings. Kevin Drum's last post on this issue seemed to end the debate, but then there is this passage that is tucked away in this article towards the bottom:

Also Monday, the high court agreed to hear the following cases in the annual term that begins in October:

• A dispute from Washington state that tests whether the U.S. government may withhold a person's Social Security benefits to collect on student loan debt that has been outstanding at least 10 years. An appeals court said seizing the benefits was allowed. The Supreme Court agreed to hear the appeal of James Lockhart, 66, who has not been able to work regularly since 1981 and had been drawing Social Security disability benefits.
Hmmm... if the SC allows for the government to effectively garnish his wages, then perhaps the idea that private accounts would be a protected asset isn't quite as established as we might think. Given the court's previous ruling on IRA's, I would guess that the SC would overturn the appellate court's decision, but one can never be sure with this group...

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