Dems Say Social Security Doesn't Add to Deficit

[Wehrwolfen]

Dems Say Social Security Doesn't Add to Deficit​

By W.A. Beatty
December 1, 2012

Congressional Democrats say they aren't willing to consider changes in Social Security in order to avoid the "fiscal cliff." On Sunday, November 25, 2012, Senator Dick Durbin (D-IL), on ABC's This Week, said, "Social Security does not add one penny to the deficit. Not a penny. It's a separate funded operation, and we can do things that I believe we should now, smaller things, played out over the long term that gives it solvency." Durbin also said that Social Security needs only a few minor tweaks, but no major reforms to ensure its long-term solvency. And, Rep. Xavier Becerra (D-CA), at a recent hearing by the House Ways and Means Social Security subcommittee, said, "Over 77 years and now through 13 recessions, Social Security has not added one penny to our deficit or our debt."

What Durbin and Becerra said about Social Security not adding to the deficit may be, for now, technically true, but "Social Security shortfalls are [indirectly] adding to the federal budget deficit[.]" For almost thirty years, Social Security collected more in taxes than it paid in benefits, thus producing surpluses. The surpluses were "invested" in special interest (2.417 percent in 2011)-bearing bonds issued by the Treasury Department to Social Security. The special bonds formed what has become known as the "Social Security Trust Fund," amounting to $2.7 trillion. That's all well and good, but (and there's always a "but")...

The government (both parties) "borrowed" from the trust fund in order to pay for other programs that, if paid for in the yearly budget, would have raised the deficit. Thus, borrowing from the trust fund became a way to hide deficit spending increases. Social Security itself does not directly increase the deficit, but the money collected in the name of Social Security certainly has an effect on the deficit. And what of the Trust Fund now? It is a myth, even though Durbin and Becerra continue to insist otherwise.

Social Security is presently paying more in benefits than it collects in taxes. As baby-boomers leave the work force, the problem will only increase. Benefit expenses will exceed tax receipts and then, after several more years, will exceed all system income, including interest. The Social Security Trust Fund (you remember, that $2.7-trillion myth) is expected, depending on whom you believe, to go broke in 2041 (Social Security Administration, see Figure II.D7. - Long-Range OASDI Trust Fund Ratios From Stochastic Modeling) or 2033 (Congressional Budget Office). Durbin and Becerra will both be long gone when either date rolls around, leaving our children and grandchildren to "hold the bag." Their "Social Security doesn't raise the deficit" speeches may, for now, be technically correct, but what about in a few years?

So what can be, or could have been, done? Simpson-Bowles? Officially, this is "The National Commission on Fiscal Responsibility and Reform," named after co-chairs Alan Simpson and Erskine Bowles. The commission recommended (among other things) that the retirement age for Social Security be raised, that the Social Security payroll tax be raised, and that entitlements be reduced. Not surprisingly, the commission failed to achieve the necessary 14-vote supermajority required to officially endorse the plan. About the Social Security retirement age raise recommendation, Paul Krugman (noted liberal and Obama supporter) called the recommendation "classist." He said:

And it raises the Social Security retirement age because life expectancy has risen - completely ignoring the fact that life expectancy has only gone up for the well-off and well-educated, while stagnating or even declining among the people who need the program most.​

But Krugman somehow manages to ignore who pays the bulk of Social Security taxes.

And, alas, as Treasury Secretary Timothy Geithner explained in February 2012, President Barack Hussein Obama could not embrace the Simpson-Bowles committee recommendations because "... the reforms to Social Security relied too much on benefit cuts."

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Articles: Dems Say Social Security Doesn't Add to Deficit

 

[Glensather]

And unfortunately, until the government finds a way to get old people off of it without screwing them over, it's here to stay for a while.

(Hint: They won't.)

 

[oreo]

Uhh--There are currently 10,000 baby-boomers retiring DAILY into Social Security and Medicare--and this will continue for the next 15 years. If there is not enough money in the Social Security trust fund to handle this--which there isn't what to they mean it doesn't add to the deficit. These programs today represent 40% of the entire federal budget. I'll tell you I think the democrat party must think Americans are dumber than dirt to make a statement like that.

 

[Clementine]

The social security fund was supposed to be sacred and kept in a lock box. Government was allowed to borrow from the surplus as long as they paid it back with interest. They owe over a trillion dollars now and probably won't pay it back. They also allowed immigrants and others who never paid into it to collect. We now have a few workers for each person collecting and I don't see how it can be sustained.

Social Security isn't supposed to be part of the federal budget, which made it really terrible for Obama to scare the elderly during the debt ceiling debate by telling them they might not get their checks. Military members and retired military members were told the same. Funny that there was no threat to welfare recipients that they might not get their money and only the ones who earned their pay/benefits were threatened. Congress never lost a moment's sleep worrying about whether they'd get their big checks. And they'll never worry about not getting their hefty benefits even if they resign in shame. And they needn't worry about relying on Obamacare, since they are exempt. I have yet to hear any liberal express outrage at that or even try to explain why that is okay.

Obama's aunt, who has been here illegally for years and probably a million more like her, collect disability benefits and get free housing and food stamps. So much for the argument that illegal aliens cannot access our system for the freebies.

With more and more retirees and fewer and fewer tax payers, Social Security is proving to be nothing but a Ponzi scheme. That is the case with socialist policies. Some people will never learn.

The Dems have spent trillions over the years on government programs, which haven't lessened the problems they claimed to fix and instead made them worse. It's all by design and that is the only explanation as to why they haven't learned their lesson over decades of failed programs. They succeeded only in gaining them a growing class of dependents, who think they need politicians to survive. The politicians spend and spend, then when the money runs out, they look to raise taxes again and again. Of course, they've done this so many times that it's necessary to vilify the rich in order to justify their constant war on them to try and keep their pet projects funded. And it's more about votes than actually helping people. If all politicians wanted the poor to be elevated, it would have been done by now. If they were to actually fix problems, they wouldn't have something to run on and they wouldn't have dedicated supporters keeping them in their cushy lifestyles.

 

[Middleoftheroad]

You are trying to confuse the issue. Either the government debt is 16T and SS is not adding to the deficit, or it is 12T and it is adding to the deficit. You cannot make a claim that it is 16T AND adding to the federal deficit since 4T of that 16T is intra-governmental holdings (I.E. SS). In the case of SS deficit all they are doing is swapping intra-governmental holdings for publicly held bonds, one debt for another debt.

 

[uscitizen]

Technically SS still has a big surplus.

Some just do not think the government should honor it's debts to the working people of the USA.

 

[Clementine]

Technically SS still has a big surplus.

Some just do not think the government should honor it's debts to the working people of the USA.

True or not, the government still owes the fund over a trillion. And the predictions that the program will collapse come from both sides.

 

[oreo]

Technically SS still has a big surplus.

Some just do not think the government should honor it's debts to the working people of the USA.

Have you got a link to your claim that the Social Security trust fund has a big surplus in it? We are currently 16 trillion in red ink with another 64 trillion in unfunded liabilities.

 

[Political Junky]

Republicans fought Social Security and have tried, in vain, to get rid of it ever since.
It's supported by taxes paid for that purpose. If we extended the amount of that tax to a percentage of a person's total earnings, SS would be set forever.

 

[Middleoftheroad]

Technically SS still has a big surplus.

Some just do not think the government should honor it's debts to the working people of the USA.

True or not, the government still owes the fund over a trillion. And the predictions that the program will collapse come from both sides.

Actually its over 3T and I explained this in my post. There is also no prediction that it will collapse. The predictions are that in 2030 that if nothing is done, it will have to reduce spending by 22%. It would then be funded indefinetly.

 

[Middleoftheroad]

Technically SS still has a big surplus.

Some just do not think the government should honor it's debts to the working people of the USA.

Have you got a link to your claim that the Social Security trust fund has a big surplus in it? We are currently 16 trillion in red ink with another 64 trillion in unfunded liabilities.

You also need to read my post and try and comprehend it, you just did exactly what I said you can't do. You CANNOT claim a 16T debt then claim there is no money is SS. If we are 16T in debt (as you are claiming) THEN SS has over 3T dollars.

 

[Dont Taz Me Bro]

Technically SS still has a big surplus.

True, but it's no longer taking in more than it's paying out. It's a long term problem that needs to be fixed.

 

[Lakhota]

Another retard thread.

HOW exactly does Social Security ADD to the debt? In fact, it does not add even one penny to the debt. Social Security is not "subsidized" by the government - it is "subsidized" by workers who make contributions during their working years. Oh, and the part employers pay is part of employees' compensation packages - which employers factor in when hiring.

Even most of you retards know Social Security currently has a $2.7 trillion surplus.

 

[Chris]

Two useless wars, an unfunded Medicare drug program and the Bush tax cuts......

That's where the deficit came from.

Clinton left a surplus.