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1 Political Atheist  Fri, Mar 29, 2013 11:25:31am

Love to see the authors reaction to this… From last August

FACT CHECK: Social Security adds to budget deficit

huffingtonpost.com

WASHINGTON — Now that Social Security is paying more in benefits than it collects in taxes, there is a fierce debate among politicians, academics and advocates about whether those shortfalls are adding to the federal budget deficit.

The issue is important because the federal government’s annual deficit already exceeds $1 trillion, making any more borrowing tough to swallow. If Social Security is adding to the government’s financial problems, it becomes even more urgent to fix it.

“Over 77 years and now through 13 recessions, Social Security has not added one penny to our deficit or our debt,” Rep. Xavier Becerra, D-Calif., said at a recent hearing by the House Ways and Means Social Security subcommittee. Becerra is the top Democrat on the panel.
Social Security is now spending a portion of the interest because it needs cash to cover monthly benefit payments.

This year Social Security is projected to pay $789 billion in benefits and administrative costs and collect $623 billion in payroll taxes and taxes on benefits, a shortfall of $166 billion.

2 blueraven  Fri, Mar 29, 2013 12:15:13pm

re: #1 Political Atheist

Love to see the authors reaction to this… From last August

If you are going to quote a fact checking article, you should really include the actual fact check portion

The Facts: Social Security’s shortfalls are adding to the federal budget deficit, in a roundabout way. One big reason: The rest of the government has been running such huge deficits over the years that it has spent all of the surpluses accumulated by Social Security.

Here’s how it works: For nearly three decades Social Security produced big surpluses, collecting more in taxes than it paid in benefits. The government, however, spent that money on other programs, reducing the amount it had to borrow from the public, including foreign investors.

[…]

In return, the Treasury Department issued special bonds to Social Security. The bonds are now valued at $2.7 trillion. They are accounted for in two Social Security trust funds, one for the retirement program and one for the disability program.

The bonds pay interest like other Treasury notes and are backed by the full faith and credit of the U.S. government.

Social Security is now spending a portion of the interest because it needs cash to cover monthly benefit payments. This year Social Security is projected to pay $789 billion in benefits and administrative costs and collect $623 billion in payroll taxes and taxes on benefits, a shortfall of $166 billion.

About $112 billion of the shortfall is from a temporary reduction in the payroll tax that is scheduled to expire in January. There is no question that money adds to the budget deficit because Congress financed the tax cut through borrowing.

The rest of this year’s shortfall, about $54 billion, will be financed by the interest payments. Social Security’s trust funds are projected to earn about $110 billion in interest this year.

3 Tiny alien kittens are watching you  Fri, Mar 29, 2013 1:40:55pm

The Social Security Trust Fund is not going to be broke until 2034 at the earliest according to the latest projection by the board of trustees (and that will change depending on the ups and downs of the economy, mortality, etc). Social Security is spending money that it collected previously and that the government then spent while handing S.S. Treasury Bonds as an I.O.U..

To say that money paid by the government (treasury) now to cover Social Securities expenses is adding to the current annual deficit may be correct but it is highly misleading. The real point being that that money is already a part of the National Debt because it is owed to Social Security and they hold the Bonds to prove it. We simply don’t have any option to NOT pay this money, hell we shouldn’t even be hinting towards not paying it. Unless of course the government wants to destroy the remaining confidence in “The Full Faith and Credit of the United States” and destroy the treasury bond market.

4 Aligarr  Fri, Mar 29, 2013 4:20:19pm

re: #2 blueraven

I’m glad somebody “gets it ” . SS is owed about $1 trillion of it’s funds , “diverted ” over the years by Congress . Eliminate Fraud and Waste and SS & SSD will be just fine .


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