Keeping Social Security's Promise

This August will be the 75th anniversary of Social Security, a milestone for one of our nation's greatest accomplishments. We should feel tremendous pride at what we have done to help Americans stay out of poverty in their retirement years.

But as we reach this landmark anniversary, there is a new commission in Washington that is looking to lower the federal budget deficit -- and their second meeting was this week.

My generation doesn't want a national debt to be the legacy we leave behind to our children and grandchildren. However, the commission is stacked with commissioners hungry to slash Social Security.

Wait a minute ... we have put billions in payroll taxes into the Social Security Trust Fund. Social Security is not responsible for the national budget deficit and the American public knows it.

Part of our country's deficit problem is that the government has borrowed $2.6 trillion from the Social Security Trust Fund and will need to pay it back -- not the other way around.

Social Security can pay beneficiaries in full until 2037 once its loan is paid back. After that, the vast majority of benefits can continue to be paid -- or full benefits with minor adjustments to the equation.

This is clearly not just a retiree issue, but retirees have a practical awareness of the lifeline that Social Security provides to millions.

Young people in the work force work hard and contribute to the system that promised some assistance in retirement, disability and survivorship. In such unstable economic times, with declining pensions, personal savings and home values, Social Security is increasingly important for younger generations.

We must stop any cuts in Social Security. But more than that, we must also use this opportunity to bring people of all ages together to lay out effective ways to strengthen Social Security for our children and grandchildren.

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Comments

[allenwsmith]

09:51 PM on 05/28/2010

Although Social Security did not contribute a dime to the deficits, it is one of the most likely targets of the fiscal commission. There is nothing of value in the trust fund with which to pay benefits to the baby boomers so, in order to pay full benefits after 2016 the government will have to raise taxes, cut other government programs, or borrow massive additional amounts of money from the public. None of these options are attractive. It will be hard to get the support of future politicians and the public for a tax increase to pay for the mishandling of Social Security money by past politicians, and the other two options are probably unworkable. So, the most likely solution is to cut Social Security benefits. To do so would be a crime just like the stealing of the Social Security surplus revenue was a crime. The American people must stand up and demand that the stolen Social Security money be repaid as the first step toward resolving the deficit crisis.

[Democrat in the South]

10:29 PM on 05/28/2010

Thank you so much for the clarification. Just unbelievable.

[allenwsmith]

09:23 PM on 05/28/2010

To say that the government has borrowed the Social Security surplus revenue and needs to pay it back is not accurate. The word, "borrowed" implies repayment, but the government has made no provisions whatsoever for repaying the looted Social Security money. We could consider the Social Security money that was raided in the years 1985-1990 as borrowed, but the Budget Enforcement Act of 1990, made it illegal to spend Social Security money on anything but Social Security. All money raided after that date was clearly "embezzled" or "stolen." because spending it was a violation of federal law. Beginning in 2016, Social Security will begin running permanent annual deficits. That is when the money stolen from the trust fund will be needed, but there is no guarantee that it will be politically feasible for the government to raise taxes at that time in order to repay the looted Social Security money.

[allenwsmith]

07:35 PM on 05/28/2010

"..the government has borrowed $2.6 trillion from the Social Security Trust Fund and will need to pay it back."...Social Security can pay beneficiaries in full until 2037 once its loan is paid back."

I am glad to see Barbara Easterling admit that the Social Security trust fund is empty. I have been trying for years to get the ARA, the AARP, and the NCPSSM to recognize that the government was spending all of the surplus Social Security revenue--not saving and investing it as it was supposed to do. I am in total agreement with Ms. Easterling's statement, "We must stop any cuts in Social Security. But more than that, we must also use this opportunity to bring people of all ages together to lay out effective ways to strengthen Social Security for our children and grandchildren." But where does Barbara Easterling think the government is going to get the $2.6 trillion to pay back the money it has looted from Social Security? I hope she is not counting on the government to sell those IOUs in the trust fund to raise the money, because the IOUs are worthless pieces of paper that are not marketable and could not be sold to anyone, even for a penny on the dollar.
Allen W. Smith, Ph.D.
Professor of Economics Emeritus
Eastern Illinois University
www.thebiglie.net