Snap-O Fact #55

Social Security, an efficiently run government program, returns 99 cents to its participants from every dollar collected.  It is a safety net that more than 52 million Americans depend on. It does not add to the deficit and cannot be subjected to the whims of the market through privatization.  But it has been under Republican attack for nearly thirty years. 

Social Security was created as a compact between the government and the people as a way to protect Americans from poverty in their golden years. FICA taxes paid by American workers are intended as an investment in their financial security. Social Security was to be administered by the government on the people’s behalf. That was how it worked for decades!  But Social Security has been plundered.  What happened, starting in the Reagan-Bush 1 administrations is a clear violation of federal law. The people’s money was not invested as planned and promised; it became part of the government’s overall funding for unfunded programs that were fiscally sequestered and not included in their annual Federal Budgets.  Contributions poured into Social Security every day and rather than being set aside and invested for future payouts every dollar was spent every day.  

In 1983, a 15% increase in the FICA tax was meant to provide for the upcoming baby boom generation. It was implemented to assure financial solvency of the System through 2040. At that time the Social Security Trust Fund was to be re-examined and adjusted if necessary. The surplus funds were intended for interest bearing investment until needed at a later date.  The use of the Social Security surplus as a way to hide deficit spending started under President Reagan and continued under President George H.W. Bush.  President Clinton continued the practice during his first term in office, but in his second term, the government stopped using surplus Social Security funds and there was a concerted effort to protect the funds from further pillage. Upon entering office George W. Bush restarted the practice and spent $1.37 trillion of Social Security surplus revenue during his eight years as president. In his last year alone he spent over $1 billion of our Social Security money every two days.  

By the time President Obama came into office $2.5 Trillion had been stolen from the Social Security System's surplus to clandestinely pay for President Bush's wars. President Obama immediately overturned his predecessor's practice of understating the federal deficit.  Such “off budget” items are now included in the annual budget.  Was the trust fund depletion really a cover up of wasteful unfunded government spending, or something more sinister… an overt action to bankrupt Social Security - or perhaps it was both?