By law, SS benefits are limited to the revenue collected thru the SS payroll taxes. SS has been running in the red since 2010, I.e., benefits paid out exceed revenue. The shortfall is made up by cashing in T-bills held in the SS Trust Fund. Once the SSTF is exhausted in 2029, benefits will be limited to the revenue collected, by law. It is estimated that this will result in a cut of about 20% in benefits.
The General Fund is impacted by the redemption of the SS T-bills. Since we must borrow money to fund the deficit, we are borrowing money to help redeem the SS T-bills, which total $2.4 trillion in the SSTF. The SSTF is part of our $20 trillion national debt.
I am guessing that long before 2029, there will be a decision not to cut benefits across the board for retirees, but to somehow change the system to make it solvent before that momentous time.
This would only happen, though, with great leadership and great American understanding. If no change to the system, this “third rail” of politics will turn out to severely bite us all.
By the way, thank you for your post and your explanation of a system people want to keep too complicated to understand.