Did Government Agencies “Raid” Social Security Funds?

You will hear, in answer to the title’s question, Yes and No. Politics seems to play a role in the answer. Also how the word “Raid” is defined may play a role.

Joejolly visited the National Review in search of an answer to the question of raiding Social Security funds.

“The Corner” of the “National Review Online” published this article by Veronique de Rugy:”Social Security and the General Treasury: Who’s Raiding Whom?

Veronique’s first paragraph reads:

Yesterday, I explained that, contrary to what OMB director Jack Lew claims, Social Security is in fact contributing to the deficit. The main reason, I argued, is that the Social Security Trust Funds are required by law to invest in treasuries. The payroll-tax proceeds collected to pay for future benefits are thereby handed over to the federal government, which spends it. Each time the program runs a cash-flow deficit, it redeams some of its trust-fund IOUs, and the government then has to borrow money, which adds to the deficit. In other words, while it’s not really Social Security’s fault, the reality is that the program contributes to the deficit. [...]

The above paragraph seems to be saying that each time the Social Security Administration needed to “withdraw” some of its deposits, the government had to borrow money. That sure sounds like a strange process. One could easily “confuse” that kind of account management as raiding Social Security’s funds.

Joejolly next visited a post by James Schaefer on the weelectedyou.org website. Here is the title:

“The Debt The Government Owes Itself For Raiding Social Security”

And here is an excerpt of what he said:

[...]Government’s “raiding” of Social Security means that American taxpayers will pay twice to provide the same benefits: first, as FICA taxes paid on earnings, then later as taxes to pay off the $2.5 trillion in Treasury Bonds in the Social Security trust fund.

You and other future taxpayers are going to have to pay tomorrow for the Social Security of tomorrow. The “FICA” you’ve paid to date was really just income tax, used to pay for long-forgotten “government programs”.

Those Social Security trust funds were supposed to be held — literally — “in trust” for America’s citizens. The raiding of that trust fund violates a fiduciary responsibility.[...]

http://weelectedyou.org/2010/08/the-debt-government-owes-itself-for-raiding-social-security/

It sure looks like Social Security funds were not properly managed. And the way it was NOT managed could easily be called “raiding” Social Security funds.

[Joejolly just received a comment from James Schaefer and here is what he said:

Please see my post (I apologize for the length) to this same topic on The People's Pension, at:

http://peoplespension.infoshop.org/blogs-mu/2010/09/20/has-social-security-ever-been-%E2%80%9Craided%E2%80%9D/

]

Advertisement

Tags: 2.5 trillion in treasury bonds, debt government owes itself, fica, government agencies, raiding social security, taxes paid on earnings