Data Summary: Social Security Discussion
Explaining the Social Security program’s role in creating the national debt in detail would require much additional time, effort, and lengthy discussion. In brief, reforms to Social Security in the early 1980’s led to collection of substantial surplus payroll taxes. The Social Security Act requires these “extra” funds to be invested in U.S. government bonds that are backed with the full faith and credit of the federal government. However, rather than selling bonds to private investors, Security trust funds are used, with interest, by the federal government. And these surplus revenues have been incorporated (and locked) into the annual budget. But as disability programs were established and the U.S. population aged, the surplus collections shrank. Then, in about 2010, repayment of these bonds became part of the federal deficit when required Social Security benefits exceeded payroll tax collections. Since then, required repayments have come from other federal revenues. This will continue until all funds borrowed from the Social Security program are repaid, which might provide some short-term relief for subsequent federal budgets. But not much, since all prior repayments will already have been incorporated into the national debt. A good discussion covering this subject is found at the following website: Does Congress Really Borrow From Social Security? in www.LegalClarity.
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