Democrats: Social Security Has “Never Contributed A Dime” To The National Debt
That statement, technically, was true until recently.
In a hearing addressing the long term solvency of Social Security, members of a House Ways and Means subcommittee battled over whether or not reforms to Social Security will help alleviate the deficit crisis. Rep. Xavier Becerra, D-Calif., defended Social Security, saying it has played no role in the mounting federal debt.
“Social Security has never contributed a dime to the nations $14.3 trillion debt, not a penny to our federal deficit or any year of our nation’s history, yet some in this town insist that we should cut Social Security benefits for seniors to pay for these deficits, deficits run up over the last 10 years principally as a consequence of fighting two unpaid for wars and giving unpaid for tax cuts to millionaires,” Becerra said. “Most Americans would say it is immoral and un-American for this Congress to tax Peter to pay for Paul’s sins, to make retirees, widows, disabled workers and children who rely on Social Security pay for the Bush debt. How can that be right?
In years past, Social Security has run a surplus. Meaning the program collected more in revenues from working Americans than it paid out in benefits to retired Americans. The surpluses went into the Social Security trust fund to be used during a time when the program’s revenues didn’t exceed payouts.
The problem, of course, is that there was never really a trust fund. There was only ever an accounting fiction the politicians called a trust fund. In reality, the federal government used the Social Security surpluses for spending and put treasury bonds in the trust fund.
Now Social Security is in deficit, and according to the program’s actuaries will be so for the foreseeable future. So in order to keep paying out benefits, the programs administrators must dip into the trust fund. But in order to spend money from the trust fund, the US Treasury must make good on its bonds.
Given that currently the federal government is broke and running a huge budget deficit, the only way to finance the repayment of these bonds is for the Treasury to borrow money adding to the national debt.
Social Security may not have technically added to the debt in the past, but the program and its trillions in mandated but unfunded spending absolutely represents an almost unpayable fiscal burden to the country.Tags: deficits, national debt, social security