• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • We Can't Afford to "Leave Social Security Alone"

    This year Social Security will pay out $45 billion more in benefits than it collects in taxes. And this is not the first year Social Security has had an operating deficit. Last year, Social Security paid out $37 billion more in benefits than it collected in taxes. And this year is far from the last that Social Security will run an operating deficit.

    Looking forward, the Congressional Budget Office estimates that Social Security will run a more than $600 billion operating deficit over the next ten years. Every year between now and 2021 will see Social Security deficits of between $28 billion and about $120 billion. Unless spending is cut elsewhere, every cent of this $600 billion will have to be paid for through either higher taxes or more debt.

    Despite these cold hard facts, Majority Leader Harry Reid told MSNBC last night: “It is not in crisis at this stage. Leave Social Security alone. We have a lot of other places we can look that is in crisis. But Social Security is not.” How can Reid possibly look at program that the CBO says will bleed $600 billion from U.S. taxpayers over the next ten years and not see a crisis? Because of a little myth called the Social Security Trust Fund.

    In one sense the Social Security Trust Fund does exist. You can even travel to the sleepy little town of Parkersburg, West Virginia and visit all $2.5 trillion dollars of it. The problem is that the special issue U.S. Treasury bonds inside the nondescript office building where the Trust Fund is kept are not real assets. President Bill Clinton’s OMB noted back in 2000:

    These [Trust Fund] balances are available to finance future benefit payments and other trust fund expenditures-but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, make it easier for the government to pay benefits. (emphasis added)

    So when Harry Reid says that “Social Security has not added a single penny” to the federal deficit he is just dead wrong. Social Security must be reformed now.

    Posted in Economics [slideshow_deploy]

    9 Responses to We Can't Afford to "Leave Social Security Alone"

    1. Kevin H, college par says:

      Conn,

      Anyone who knows the federal budget at all should know dealing with Social Security is a drop in the bucket compared to the real driving factors of the long term deficits and debt – the rising cost of health care – in Medicare, Medicaid and in private insurance. Nothing else comes close.

      We could easily fix social security by ending all the spending from tax expenditures. Why do we continue to give out huge sums of taxpayer money to oil corporations who are making record profits? if we end tax expenditures, we'll have more than we need to deal with Social Security.

      We can end the 2003 Medicare Rx plan that Republicans passed in incredibly shady ways using reconcilliation and holding the vote open into wee hours of morning until Tauzin was able to change enough votes – then he left right away to head Pharma – coincidence?

      Think if we were spending trillions on Iraq. Wouldn't that be helpful?

      Conservatives criticize TARP, but taxpayers have gotten 99% of the TARP funds back and it helped save economy from depression. What did Iraq do and how much have we gotten back from that?

    2. Yankee says:

      Unfortunate that some of our elected representatives, whether deliberately or not, fail to fully understand the very things they're in charge of.

    3. steveegg says:

      Slight correction on the AP's claim of a "mere" $37 billion operating deficit – it was actually $49 billion according to Social Security's Office of the Chief Actuary (or if one wants to be more precise, $48,895 million). $33 billion was in the OASI operations and $16 billion was in the DI operations.

    4. Bobbie says:

      What a liar! What about all those people getting it that didn't pay into it, Harry? It is in crisis when many of those involved, whether recipient or social worker, has successfully frauded the system with corruption. Take away social security from those that didn't pay since you were so specific to identify protecting those that did, do and are. Clean up the corruption and fraud and that will add to the drops in the bucket necessary to remove government corruption.

      The American people deserve integrity from those out of our control running the country, Not haphazards and ineptness.

      There you go again Kevin H,. Listening to just words and blind to all facts and consequences. You're ignorance is suspicious.

    5. fish says:

      I am 44 and receive ss and ssi. I have since 1992.

      I worked and paid into the system like everyone does, but certainly I have paid less in then I have recieved out. Now what?

      I am severely disabled.

      Last year my total income from ss was $5914.00 and half of that for ssi.

      It can certainly seem like you pay me a lot of money, but if you were to take all of my bennefits and strip me of my ability to pay for housing and food, it would still be a drop in the bucket compared to what you would gain by having corporations pay taxes. Bank of America paid no taxes at all last year, or the years before that. How much did the bank charge you for interest? Late fees? Over draft charges? Yet they pay nothing into society?

      It is not easy to live off less then $6,000 a year. Yesterday, I had to return food in order to pay for my medications. Every penny I get goes right back into society by means of me paying for utilities, housing, food, gas and other essentials. By the 10th of the month I have no money left and I try to coast through the end of the month.

      I don't drive a Hummer. I don't leave the store with three carts of food stuffed with crab and lobster. I buy the food that is dented and cut open because it is half the cost. Some aisles of the store I don't go down at all. I buy my clothes from garage sales when I can afford too.

      Why is it that it seems like people on the Right call me a free loader? Why am I the bad guy? Why do the services that are meant to help people like me get cut first and deepest? Where is this God that so many of you talk about? Where is compassion?

    6. Bobbie says:

      fish- Don't feel guilty if you receive more than you contributed. SS is taken from all paychecks of those who are not exempt.

      We're speaking of the fraud and corruption and the fact that we pay into Social Security that's in the control of government, that's now in crisis because of.

      We believe in the purpose of social security but detest it's gotten into many of the wrong hands.

      Government broadens the qualifications and makes exceptions upon exceptions Now those running ss and recipients that take advantage have gotten away with so much it's caused heavy sacrifices on the innocent.

      Social security revenue is divided into entities it shouldn't have been, allowing people that didn't pay in, to receive it and behind the backs of those that did pay. That leaves the truly qualified with less.

      Private Insurance is paid into by everyone who chooses and those who need it the most will be the ones to use it. Those who keep healthy enough not to need it, appreciate the investment of peace of mind. People take advantage of private insurance also, that's why rules and regulations (businesses not government) are applied and if not followed private insurances, unlike government, take corrective actions. Private insurance can be shady and that's where the recipient can also take corrective action. But when government isn't following their own rules with dignity to keep the process honest, cover ups and taxes increase!

      I'm sorry if you were called these denigrating words. I don't know anyone that would personally attack someone severely disabled except the mentally challenged. There are free loaders, however. I pray for you and hope you are able to find necessary resources to fulfill your life. God Bless!

    7. fish says:

      Thank you Bobbie.

    8. M.Rousselle, Midloth says:

      Clinton left Bush with several trillion $ surplus.

      There would be money for Education,SOC,Medicare & all the other programs if Geo

      Bush had not gone to war in Iraq & giving the rich the tax break that he did. I have a rich relative. He let every employee go.at his building co. Stopped the 10% senior discount at his 25 restuaurants. He bus in his employees from a prision for teens. He is into gas stations. Because of the tax break he is making more money than ever.

      The Bush D.drug coverage is costing us tax payers a bundle & is no good.

      I paid for my Health Ins. for 55 years. Because of the Bush 2003 D. drug cov. in 12/31/2009 my Ins. Co. cancel every employee's Health Ins. & put us under the D. drug coverage.

      My husband now has cancer. Since 1/1/2011 we have paid about $1,500.00 for

      his medication & the Ins. has not paid a penny. That amount does not go toward our deductible.

      I did not vote for this president but I support his Health Care policy.

      We need to think about what is the best for all the American people instead of giving our $'s abroad.

    9. Pingback: social

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×