The answer is clear:
No, yes, not really, technically yes under the unified budget process.
Social Security is self-funding. It uses dedicated taxes to pay benefits. When there was more tax revenue than needed to pay benefits and expenses, the trust invested in interest paying Treasury bonds.
That is no longer true. Because of the inaction by our Congresses, those Treasury bonds are being redeemed to pay benefits because payroll taxes are insufficient.
Let’s say the trust redeems $10 million in bonds. Where does the $10 million come from? From the federal government and since the government is already running on deficits, it must borrow more money to give the value of the redeemed bonds to Social Security.
Hence it is claimed Social Security adds to the unified budget deficit. OF COURSE THAT IS NOT TRUE.
If the federal government was not running on deficits, there would be no need to increase the deficit to redeem Social Security bonds and if Congress had taken the appropriate actions over the years, there would be no need to redeem bonds to pay benefits.
Bottom line.
QUINNSCOMMENTARY 
Richard, if you don’t think any politicians use the Trust to its detriment, then specifically how do you propose they fix Social Security funding? Do you think payroll taxes are insufficient, so they should increase the payroll taxes?
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There is a straightforward, bipartisan, intergenerationally-savvy, politically-savvy solution to social security funding which would make the program sustainable, indefinitely – without any future change.
Coming up with a solution isn’t an issue. The issue is that people want to change the benefits to continue to use the system to buy votes, and send the bill to others. For example, see most anything Bernie and Liz might propose regarding Social Security.
A politically-savvy, bipartisan, intergenerationally-savvy funding solution has a number of steps:
First, it starts with an admission by Congress that they deliberately, intentionally, consistently promised more than they were willing to tax – always anticipating that the bill would be shouldered by future taxpayers. That is, Congress needs to tell everyone in the system that they didn’t earn anything, and certainly not the promised benefit, they didn’t pay enough in FICA taxes.
Second, Congress must have the SSA confirm to everyone in the system, current workers and those already in a payout status, how much they failed to contribute, cumulatively, to make the system indefinitely sustainable.
Third, Congress should commit to never adjusting the SS benefit formula – so that there is a clear, defined target for funding. If Congress wants to add benefits, they should create a separate program, and, if necessary, offset what is part of Social Security.
Fourth, Congress should give each individual in the system a number of options or choices on how to fill the gap (increased taxes, reduced benefits (but not below poverty levels), defer commencement, etc.) – as a “surcharge” to fill the funding gap, because they all failed to pay enough because Congress failed to charge enough in FICA taxes and/or adopted a formula that provided benefits in excess of the funding, or both. Those options all have “pricetags”, where a surcharge is added to each in anticipation of antiselection.
Fifth, to ensure younger workers and future generations are certain they will receive the promised benefit, change Social Security from an entitlement to a contract – a contract among Americans.
Sixth, annually update the pricetags in step 4, so that additional legislative changes are never needed.
This works in everyday life, in corporate benefits, for example. It was always surprising to me how willing workers were to accept changes where they were honestly informed, and where they had a choice of options on how to address the challenge – and how favorable they perceived the change to make the system sustainable.
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The answer is NO! It’s not yeah,, no, maybe, coulda, woulda, shoulda it’s NO! “Unified Budget Process” is simply a financial scam invented by our politicians to get their grubby hands on money that was specifically designed not to be used for anything other than Social Security. This started back in 1968 when Johnson was the first to include various trust funds (social security) in a “unified budget.” (social security.gov.history) Four year later Nixon got involved and soon Congress changed the budgeting rules, that included this scam of a unified budget!
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But there was no negative effect on Social Security, no diminishing of the trust no mingling of trust assets. No use of trust money for anything else.
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All I hear is is not fixing Social Security funding. But what is the fix so the politicians can’t mess up? More taxes for Social Security won’t fix the politicians, it will only make the problem bigger. Even if SS gets more tax revenue the federal government pays more interest to SS every year on the larger savings pot called the SS trust fund, but not fix the politicians’ irresponsible handing the tax revenue. You have only treated a symptom not the disease.
Power corrupts, and absolute power corrupts absolutely. The more tax revenue just gives the politicians more power over the US citizens. The more we get from the government in $ and services, the less personal responsibility each of us on the receiving end have until we are are totally reliant on the federal government. Like frogs in a pot of warm water on a stove top with the politicians turning up the heat.
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Yes, it is what it is and must be dealt with in one way or another. Mistakes were made along the way, the excess should never have been collected to start with. The program could have been operated without building a massive slush fund for various administrations to use however they chose.
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Nobody uses the trust to its detriment. It’s no different than Japan buying bonds. When they are redeemed, they are paid back and in the meantime they pay interest.
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Not sure what you mean by nobody uses the Trust to its detriment. When the money came in back when the Trust was over funded, the bonds were issued and the dollars were used somewhere else. The Trust was credited, and interest was posted but the excess taxes collected to accumulate that huge surplus prior to 2010 was spent who knows where. So yes, the books look good if that is what you mean.
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What do you mean who knows where? The money is immediately used to pay benefits and expenses or used to buy the bonds. The so-called excess taxes build up over the years are in the bonds – an asset of the trust. Just like when you purchase a savings bond, the government spends the proceeds as it wants. SS is no different. Today all tax revenue plus interest is spent immediately plus bonds redeemed to pay benefits.
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the difference between these bonds and other investments is that when the trust sells the bonds to generate cash to pay benefits, the money comes from. … more taxes – typically general revenue stuff, where the idiots running our government now have a $34 Trillion debt, increasing to $48 Trillion by 2034 at the time the trust is exhausted, and assuming no new taxes and a 20+% benefits cut, the idiots spend rate is such that the CBO predicts a $146 Trillion debt by 2054. So, even if there is a market for that, the idiots used the fica “contributions” to finance deficits and still mucked it up.
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The federal govt couldn’t organize a one car funeral !
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and if my mother-in law had wheels she’d be an auto bus–and if wishes were horses beggars would ride–and if ifs and buts were candies and nuts what a wonderful world it would be.
however you cut it SS is in the soup–but who would be surprised that the feds have made a mess of another program.
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