By misappropriating the Social Security surplus, Congress is betraying the public trust and jeopardizing our financial future.
"Because more money is collected than is paid in benefits, Social Security runs a substantial surplus," observes Sandra Butler of the United Seniors Association. If those surpluses were deposited in the Social Security Trust Fund, as they should be, that fund would now have a balance of $600 billion. "Such a balance," says Butler, "would ensure the Social Security system's solvency well into the next century, the year 2029. But there's a big problem. The Social Security surplus is not in the trust fund!"
Where did the $600 billion go? "The money has been spent as fast as it's come in," says Butler. She points out that "the government started 'borrowing' the surplus from Social Security to hide the true size of the federal deficit. In place of the money, the U.S. Treasury began to give the Social Security Trust Fund 'special issue, non-negotiable bonds.'" Butler says these bonds are no better than IOUs, and are almost certain to be defaulted on.
The government's handling of Social Security is both deceitful and reckless. "Raiding the Social Security Trust Fund not only masks the real size of the annual budget deficit by roughly $50 billion every year," observes Butler. "It also puts the entire Social Security system in jeopardy much sooner than previously anticipated. In reality, Uncle Sam will have to pay the piper in just 15 years, when the amount paid out in Social Security benefits will start exceeding the amount collected.
"When that happens," warns Butler, "instead of real assets on which to draw, the Trust Fund will contain only IOUs owed by the government to itself. So, when the Social Security bills come due, the government will be forced to come up with the cash. This means taxes will have to be raised, Social Security benefits drastically cut, or some combination of both."
Butler suggests that Congress might "pass legislation creating a legitimate trust fund for Social Security that contains real money. This would at least stop the trust fund from being abused as a slush fund. Another way," she continues, "is to give the American people the option to have their Social Security taxes placed in private investment accounts, such as mutual funds, where they can earn money in the market."
Another alternative, of course, would be to eliminate Social Security altogether, and let people go back to taking care of themselves. The prospect of self-reliance, however, is too frightful for the sniveling Americans of today, and so the Social Security System must be repaired. Unfortunately, the only things our public servants in Washington seem able, or willing, to fix are things that aren't broken. Sandra Butler concedes that "no substantial reform of Social Security is on the horizon. For the moment," she warns, "abuse of Social Security continues, imperiling not only the retirement benefits of the nation's seniors, but the financial prospects of the next generation."
