Truth or Lie: Social Security Doesn’t Add to the Debt

American Thinker ^ | 02/27/2019 | Jon Hall

[SeekAndFind]

Congress, the branch of government that controls the purse strings and that is therefore responsible for the national debt, passed yet another milestone the other day when the debt blew past $22 Trillion. That’s a 14-digit liability that the American taxpayer is on the hook for. What a deal -- members of Congress get to buy your vote with your kids’ money.

In November of 2012 on The Ed Show (mercifully cancelled in 2015), Vermont Senator Bernie Sanders said: “We are not gonna cut Social Security, which, by the way, as Harry Reid just reminded us, has nothing to do with the deficit.”

Well, there’s an opioid epidemic in Vermont (which might explain how a socialist like Sanders could be in the Senate), but there are other left-wing career politicians who say the same thing. So the question is: Is Sanders right? Does Social Security, usually the largest expenditure of the federal government, have nothing to do with the yearly deficits Congress runs and the national debt?

To answer that, look at the numbers: Table 1.1 of the historical tables at the Office of Management and Budget. For those who have neither PDF nor XLS capabilities or who just don’t want to go through the rigmarole, I’ve spliced together some screengrabs of the last page of Table 1.1 and made them into a jpeg for your convenience. Just click on this link and it should load up quickly. Then click on the table to blow it up to full-size. (Right-click and select “Open link in new tab” if you want to “toggle” back and forth between this article and the table.)

[SeekAndFind]

Table 1.1 is divided into three sections: Total, On-Budget, and Off-Budget. The On-Budget is discretionary spending, and the Off-Budget is mandatory spending, which is mainly for social programs like Social Security which have their own dedicated taxes, e.g. the payroll tax. The On-Budget is the real budget that Congress is supposed to pass legislation for, while the Off-Budget is not budgeted, it’s automatic spending. Each section is divided into Receipts (i.e. revenue), Outlays (i.e. spending), and Surplus or Deficit (i.e. the difference between revenue and spending). We get the Total figures by adding up the On-Budget and the Off-Budget figures.

If Social Security doesn’t affect the deficit, as Democrats contend, then it also wouldn’t affect any surplus. But from 1998 through 2001, there were four Total surpluses, and only two of them coincided with On-Budget surpluses, which were tiny in comparison with the Off-Budget surpluses. The four Total surpluses came to $559B.

We used most of those surpluses to pay down the debt. Corroboration for that can be found in Table 7.1 of the historical tables, which lists the federal debt at the end of the fiscal year. Table 7.1 shows that the publicly held debt (the real debt) was $3.772T in 1997 and came down to $3.319T in 2001. Over four years, we actually paid down the debt by about $453B.

And most of those four surpluses were due to Off-Budget surpluses, primarily from Social Security. Less than 15.8 percent of the Total surpluses were On-Budget. We paid down the publicly-held debt… with Social Security surpluses.

Now look at the four trillion-dollar deficits Congress ran from 2009 through 2012. Each one of those record-setting deficits would have been even bigger were it not for the Off-Budget surpluses. For example, the $1.412T deficit in 2009 would have been $1.549T, almost $137B higher, which, as you can see over on the right, is the size of the Off-Budget surplus. The feds call this the “unified budget,” and it’s no way to run a railroad.

[Dilbert San Diego]

I’ve heard social security has “unfunded liabilities”, which are not included in the official $22 trillion national debt.

I heard that since the unfunded liabilities are projections going forward for decades, that for this reason we don’t know how much they are. So today’s politicians take the don’t ask, don’t tell approach; they don’t want to know whY those future liabilities are. And in any case , today’s politicians know they will be out of office at some point, and someone else will have to deal with it.

[HangnJudge]

Not near as bad as Medicare

123 trillion US unfunded liability total
20 trillion SS
29 trillion Medicare

[Kozak]

If you did your accounting the way the Feds do theirs you would go to prison for fraud.

[HangnJudge]

http://usdebtclock.org/

[dp0622]

Wow.

Never knew.

Well it should get better with people living to a gazillion now.

Mom and aunts and some uncles will easily surpass 90.

Of course i’m glad.

But it’s killing US.

And when the average life span is 90 one day, how high can you raise the retirement age?

Just because you reach 80 doesn’t mean you can work full time!

[ManHunter]

Yeah, and Bernie Madoff went to prison for running a Ponzi scheme! If he’d been a member of Congress, they’d have called it a benefit program.

[pgkdan]

If he’d been a member of Congress, they’d have called it a benefit program.

Hell...he'd probably be made chair of the Ways and Means Committee.

[VanShuyten]

Social Security doesn’t add to the debt because all that money comes from that famous “ lockbox” Congress has hidden away somewhere.

[Lurker]

“because all that money comes from that famous “ lockbox” Congress has hidden away somewhere.”

Which is a filing cabinet stuffed full of IOUs from Congress.

L

[cgbg]

Believe it or not, there is an actual “lockbox”.

It is a cabinet in Parkersburg, West Virginia.

https://moneymorning.com/2017/03/31/the-social-security-trust-fund-is-just-a-stack-of-ious-in-a-west-virginia-filing-cabinet/

The problem is the “lock box” contains IOUs from the government to the government.

It is the old street shell game...do I have a few trillion under this shell—or that one.

[shelterguy]

Social Security doesn’t add to the debt because all that money comes from that famous “ lockbox” Congress has hidden away somewhere.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Where does the money for welfare and all the social programs come from? Nobody talks about that fund running out of money.

[arthurus]

Social Security is the source of Clinton’s “balanced” budgets. SS revenue had not been counted as revenue before that. SS was still taking in more than it disbursed. Now we don’t even maintain the fiction that SS is an untouchable fund.

[conservatism_IS_compassion]

The problem is the “lock box” contains IOUs from the government to the government.

You don’t have to be a government to write an IOU for a quintillion dollars, as long as you write it to yourself. The problem is that when the government does it, people take it seriously.

It isn’t money, it’s a mere record of money the government “borrowed." And spent.

There are three useless things in aviation:

• altitude above you,
• runway behind you, and
• fuel used.

I don’t care who you are, money spent is in the same category.

[Wuli]

The day of reckoning is coming due for the Ponzi scheme known as the “Social Security Trust Fund”.

[fireman15]

Well it should get better with people living to a gazillion now.

I guess that you are not aware that the average life span in the USA peaked and has started dropping since around 2014. Some people attribute this to the “opioid epidemic” and financial stress but inactivity and poor diet resulting in obesity and increased risk of cancer and heart disease is likely to be a more significant factor. Death from cancer has been on a continuous rise since 1950, and heart disease, the leading killer which had been declining since the 1980s has started going up again.

Until common sense returns to people's choices on diet and exercise... lifespans will continue to drop.

[conservatism_IS_compassion]

Social Security is the source of Clinton’s “balanced” budgets.

True.

SS revenue had not been counted as revenue before that.

I’m confident that that started in the Johnson Administration.

SS was still taking in more than it disbursed. Now we don’t even maintain the fiction that SS is an untouchable fund.

The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

The Wealth of Nations, Book IV, Chapter II

[arthurus]

Congress changed the way SS revenue was accounted for in the Clinton administration. It was an attempt to “get real” because the SS revenue never was in a “fund” but always used as general revenue except on the official books.Before, SS surplus was “borrowed” to fund deficits. After it was just spent.

[volunbeer]

The problem is worse than lifespan which has leveled off, but is still far higher than when the program was started. More and more people are going onto SSI (disability) far earlier in their life. In many cases they are not working or hardly working so they pay in nothing. SSI has become another form of public assistance that can be accessed for having a hyperactive child and a whole host of other issues. Much of our homeless population struggling with addiction problems are on SSI.

Illegal immigration is also going to impact social security in a very big way. While most illegal immigrants work, they do not earn much and some work for cash under the table. However, when they are granted amnesty (seems inevitable to me) and become citizens they are now eligible for social security (and medicaid). They will consume far more than they contributed. This is an indisputable fact and it is also true for medicaid/medicare. The programs go broke on their own, but illegal immigration will accelerate the inevitable by many years.

Medicaid and Medicare are the biggest debt bombs, but absent fundamental changes to the system there is little doubt that social security is another ticking bomb that threatens our financial well-being and the future of our children. It is a classic Ponzi scheme and everyone knows how the story ends. The reality is that neither political party will touch either program because it is certain political death so they will continue to kick the can just like they do with everything else.... future generations be damned.

There is now another giant elephant in the room from the last few decades that is growing every year - our national debt. As long as congress fails to rein in spending the cost of servicing our debt (and the debt itself) will continue to grow and eat up more of the budget. Many suggest we can grow our way out of it, but that would require a balanced budget that addresses all government spending to include entitlements. That will not happen because we lack leadership and our populace is too ignorant (or they simply do not care) to understand what we are doing to our children and grandchildren. We are living above our means today and will certainly drown in debt tomorrow and our kids will pay the price.

This is not only a Federal government problem although our national debts and unfunded liabilities dwarf all others. Many of our states and local governments have the same problems on a much smaller scale. Individual or household debts are a problem. These will also accelerate the explosion as irresponsible states look to Uncle Sugar for a bailout and most of those states have the most political clout.

It will end ugly.

[MidniteRyder]

Due to the bipartisan raiding of SS funds they are now in danger.Will it be fixed?Not on our watch while politicians play kick the can...