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The White House is still chasing its White Whale

2
blueraven3/29/2013 12:15:13 pm PDT

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.