Dear Rusty: It is common knowledge that over the decades politicians have taken billions if not trillions of dollars out of the Social Security fund to finance other government programs. This information is never published or addressed and having the government repay this money back to SS is never discussed, as it seems to be the most logical solution. When the SS program is financially viable again, future changes to the program can be discussed in a more meaningful way. Signed: Informed Senior
Dear Informed: I’m afraid that what you refer to as “common knowledge” is actually a common myth, pervasive on social media but nevertheless not accurate. Here at the AMAC Foundation we have thoroughly researched this charge and reality is that every dollar ever contributed to Social Security since the program’s beginning has been used only to pay benefits to beneficiaries, or to pay for the cost of running the Social Security Administration (administrative costs are about 1%). Any surplus revenue exceeding program cost was deposited into the Social Security Trust Fund as “special issue government bonds” which pay interest (at 2.2% for 2019). As of the end of 2019 there were nearly $2.9 trillion in assets held in Social Security’s Trust Funds, and none of those assets have ever been used for any purpose other than Social Security.
Some of the myths you may have heard include:
• That President Kennedy used SS funds to pay for the Peace Corp.
• That President Reagan used SS funds to pay for his Strategic Defense Initiative
• That President Johnson used SS funds to pay for the war in Viet Nam
None of these are true, but the one which gains the most visibility is the last one. And that comes from an accounting gimmick that President Johnson used back in the 1960s to make the Federal debt look less than it was. When Johnson realized the Federal balance sheet didn’t reflect assets held in the Social Security Trust Funds, he arranged for that balance sheet to reflect SS reserves as a Federal asset, which masked the size of Federal debt. But no Social Security money was ever taken out of the Trust Funds and, indeed, this accounting “gimmick” was reversed in the 1980s so that Social Security’s reserves no longer partially offset the Federal debt in the Government’s financial reporting.
I know how pervasive these allegations are, and I also know that some Americans will ...