No Money in the Social Security Trust Fund

By on February 22, 2010 in Current Events, Retirement with 30 Comments

The raiding of the Social Security trust fund became a major issue during the 2000 presidential election campaign. Al Gore introduced the issue when he proposed the “Social Security Lockbox” during his acceptance speech, but it wasn’t long before George W. Bush was also promising to protect the Social Security surplus revenue.

During a speech at Rancho Cucamonga, California on May 15, 2000, Bush said, “Social Security is the single most successful program in government history…For years, politicians have dipped into the trust fund to pay for more spending. And I will stop it.”

The previous raiding of the trust fund by Presidents George H.W. Bush and Bill Clinton was despicable. However, at that time, the issue had never been subjected to a public debate where the American people could speak out on it. That all changed as a result of the 2000 campaign and election.

Every American who cast a vote for either Bush or Gore had a right to expect that the era of raiding the Social Security trust fund was over. They had entered into a new covenant with the would-be future President of the United States, in which it was mutually agreed that all future surplus Social Security revenue would be untouchable for any purpose other than the payment of Social Security benefits.

Bush continued to sing the same tune once he became President. He continued to insist that Social Security revenue would be used only for Social Security. In his first State of the Union address on February 3, 2001, Bush said, “To make sure the retirement savings of America’s seniors are not diverted in any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security, and for Social Security alone.” Four days later, Bush said, “We’re going to keep the promise of Social Security and keep the government from raiding the Social Security surplus.”

Because of all the rhetoric and news coverage of the Social Security trust fund issue during the campaign, and in the early months of the George W. Bush presidency, the American people came to believe that the Social Security trust fund was no longer being raided. But nothing changed with the inauguration of George W. Bush. Despite his pledge to protect the Social Security money, Bush spent every dime of Social Security surplus revenue that came in during his presidency. He used it to fund his big tax cuts for the rich, and much of it was spent on wars.

The news media had given extensive coverage to the Social Security debate in the 2000 election campaign, and to President Bush’s early promises to not raid the trust fund. However, Bush’s failure to honor his promises, with regard to Social Security, just never seemed to get much news coverage, leaving most Americans to believe that the raiding of the trust fund ended after George W. Bush took office. On the contrary, Bush raided and spent a total of $1.37 trillion of Social Security surplus during his eight years as president. In his last year, he spent $192.2 billion, which averages out to more than $526 million per day.

During a speech on April 5, 2005 in Parkersburg, West Virginia, Bush openly admitted to the fact that all of the Social Security surplus revenue had been spent. He said, “There is no trust fund, just IOUs that I saw firsthand that future generations will pay—will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs.” Bush’s words in this speech bore little resemblance to what he had said about Social Security during the 2000 campaign. But his motives were different in 2005. He was trying to sell his privatization plan, and he thought that by spilling the truth he might further his effort to privatize Social Security.

There would be no Social Security funding problem for at least the next 25 years, if the government had not raided the trust fund. If the trust fund held the $2.5 trillion of surplus Social Security revenue, in the form of real marketable bonds, as it should, it could continue to pay full Social Security benefits until at least 2037. So the obvious solution is for the government to make arrangements to repay the $2.5 trillion it owes to the trust fund.

© 2016 Allen W. Smith, Ph.D.. All rights reserved. This article may not be reproduced without express written consent from Allen W. Smith, Ph.D..

About the Author

Post a Reply

Your email address will not be published. Required fields are marked *

30 Replies

Comments RSS

  1. kentuckywoman2 says:

    We should raid Bush’s retirement fund and all the “perks” he continues to get – such as security, etc., “liquidate” those assets and divert them to the Social Security fund until all $1.37 TRILLION that Bush STOLE is paid back.

  2. nobonesl says:

    Bush and much of the GOP should be in prison for crap like this.
    And the RW media made such of point of laughing at Gore’s use of the term, “Lockbox”.
    Mission accomplished.

  3. flashbyte says:

    I paid into it for thirty five years plus……….how can there be no money?  Can you say “fraud and corruption”

  4. wombat1951 says:

    Social Security was never “raided” — it was set up from the beginning to provide Treasury with every penny of excess SS tax revenue collected, and then have the non-marketable non-asset “special bonds” put into the phony “trust funds”.
    :
    There has never been any real “money” in the SS trust fund.   It has never been “raided”.  What HAS happened is that policitians from both parties have lied through their teeth for decades about the reality of the ponzi scheme perpetrated by SS and the “trust fund”.

  5. BlueAngel124 says:

    Lordy, Lordy, how unethical politicians become when misspending other peoples money.  The raiding of social security is a disgrace because it betrayed the very people it promised to protect.  When I started working in my younger years-several moons ago-cough, cough….I was told my government would MANDATORILY take money from my paychecks for social security to be available for my retirement years.  Millions of workers agreed to this agreement with the understanding this fund was for the folks contributing to the fund and NO ONE ELSE.    Now we find out social security has been used to fund wars, big tax cuts for the rich and other programs.  How many people have you seen immigrate to the United States and automatically be eligible for social security without ever paying/contributing a dime into it?  How many people have been eligible for medical services without ever contributing?  Yet now that baby boomers are approaching retirement, our government sees fit to annouce the insolvency of the system?  It appears the only people that can remain on it or receive social security are those who did NOT contribute to it!  This is unacceptable and we should demand our government re-fund social security by disqualifying those who do not need it, which are those who:  #1) Have not contributed to it and; #2) The wealthy individuals who no longer need it.  Anything less is criminal.  Also social security should be be placed in a non-general account so it cannot be raided by greedy politicians or anyone else.  Is this too much t ask?     

  6. Ron says:

    Bush was a horrible president but to be completely fair how much has your current president stolen from our SS fund?

  7. Grandmomfroggy says:

    The answer to this.
    Cut out all pension programs for Congress!

  8. Maggiecharles1 says:

    This enlightening information just makes me want to sit down and cry!!!  I, and many, many other “baby boomers”,  have worked 40 or 50 years with trust in the fact that when we got too old to work – the money taken out of every paycheck would be there for living expenses.  This is the worst betrayal of all time! The totally last thing the citizens of this country need is for the crooked, untruthful politicians to “privitize” social security!!! Apparently, there isn’t anything left to “privitize.”  Just look what they, over the years, have done — destroyed the fund!  All the while us blind sheep placed our trust and our money in  
    I firmly believe that all adult citizens in this country need to totally demand that the government repay every red cent taken from Social Security.  I agree that a Constitutional amendment must be proposed now and passed into law.
     

  9. Gunnerotown says:

    My fears are great. I’m currently a new Social Security (SS) recipiant after contributing for approximately 47 years. May I recommend that all future THINGS or CHANGES impacting SS go to the American people for vote. This principle is used by our unions and many companies. Also, our Senators and Congressmen (& Congresswomen) should (must) participate and receive the same SS pensions as the average CONTRIBUTING American and NOT vote themselves into a pension plan (without the approval of the American voter) that’s far better than what the average American receives … they are not royalty. If I were a Congressman or Senator, my butt would would be in my elected district listening and voting to the needs and requests of the people I represent … NOT PARTY LINES!!!!!!!!!! My office in Washington, DC would be dusty and grossly unused … my presence would be to debate and place my PEOPLE’S vote. If these issues persist and the American people do NOTHING perge them, then the fault or blame should and must fall on our shoulders. SO!!!! AMERICANS USE YOUR VOTING RIGHTS AND LETS RID OUR COUNTRY OF ALL USELESS, SELF-SERVING POLITITIONS …………………………………

  10. Peach says:

    And        the same raiding of the CSRS Trust Fund  that is now just IOU’s….

    Just bring manufacturing jobs back to USA and hire US citizens..who contribute to SS…problem solved!!!

  11. G- says:

    Granted, the government should repay Social Security what it owes and it probably will.  IOUs do add up to money in the long run.  

    But, the Social Security Trust Fund would probably be solvent forever if two small steps are taken:1 – stop giving tax benefits (2%) on FICA withholding.2 – stop limiting payments on salaries over $106,000.  FICA taxes should be paid on all salary and self employment income, regardless of the amount earned. 

  12. Michael D Johnson12 says:

    We need a constitutional Amendment to protect the programs. 

  13. Cantewastenapeciyuzapi says:

    Most people simply do not realize that the raiding of the Social Security Trust Fund began under George H. W. Bush continued through Clinton and George W. Bush.   Democrats and Republicans are both to blame, as Republican and Democratic Congress’ have raided it.  Currently, the government is using the trust funds of entities such as Civil Service Retirement System to keep the government afloat until August 2.  We actually ran out of money back in May.

    Congress should ensure that Trust fund accounts are repaid in full.  This would be Social Security and CSRS and any other trust funds that Congress has raided.

    Congress should ensure that all of our war effort is actually “put on the books” and not “faked” up like Bush did by hiding the actual cost of the war.

    I personally think that our troops should be brought.  We cannot afford to be the world’s police force.  We should use the bulk of our war funds to get our country back on solid footing.  THEN< AND ONLY THEN should we look at the problems of the rest of the world.

  14. Sam says:

    Why can’t someone like the ACLU sue Congress to get it back and to charge Congress with theft? 

    • Zaren says:

      Are you joking???? The ACLU should never be included in anything that has to do with America, or their Citizens. They are trying to remove anything that has to do Religion, Prayer, or our way of life. I hope you didn’t buy Progressive Insurance, because they are all one of the same. Ever heard the name Soros??He owns Progressive and also most of the Gun Producers. He wants to destroy America..

  15. Gjilnicki says:

    These members of Congress caused this and know they should fix it with out hurting the American people that count on the trust fund.  Trust funds should not be raided for any other purpose than the purpose the trust was set up for.  With all they lawyers in Congress they should now that and know it is a crime.

  16. Cj Jefferson says:

    Why have this not been aired to the public.  Why are we lead to believe that the present administration is responsible for the social security short fall.  Will the people ever know the real truth about our government or, will deception be the motive to continue the sell of propaganda. We need to move from self agendas and find solutions that work.   

    • PA says:

      THE NATIONAL DEBT IS OVER NOW OVER $16 TRILLION.  According to the US Treasury, the debt of the US Government increased by a total of $1,275,901,078,828.74 in FY12.
      The federal government is currently spending much more than it has, and annual budget deficits are over $1 trillion and have become the norm.  We are the next Greece! 
      How is this hope and change working for our country?

  17. Holliscross621 says:

    Obama’s Stimulus Money should 1st be spent on re-funding Social Security.  We don’t need the Stimulus Money to prop up Obama’s friends.

  18. MarchMarine17 says:

     One myth of the  Reagan era, is that ‘Ronnie saved Social Security’. If that were really true, why then are we being pounded constantly by the Republican elite to gut/slash/save this program that has helped many millions of Americans since it’s inception?Do not Republican tax payers not also pay into Social Security? Why does the GOP HATE this good program? Why is there never any story about the failure of Reagan to do anything positive at all about Social Security, except to screw the CSRS workers who had previously earned their 40 quarters prior to government service, with his Windfall Elimination Program?Please read guest of three months ago.

    • Cantewastenapeciyuzapi says:

      I would just like to add the GPO [government pension offset], that takes any Social Security yo might be eligible for and reduces it by 2/3.

    • Ron says:

       I read where prez Johnson is the one who took the money out of a private fund and placed it into the General Fund…so they could borrow (steal) it.  Reagan did not truly fix the problem he only added to our misery by increasing the percentage we pay and increasing our age for benefits.  They are all crooks and will remain so as they are the one who make the laws.  SS has no problems other than the politicians who borrow and of course giving it away to illegal aliens who cross the boarder and have a child and receive our SS money until the child is 18.  Ever hear of any other country doing that?

  19. Guest says:

    With our coffers depleted by war, indulgence, corruption and mismanagement we are now looking to the poorest of us to make up the shortfall. Cut social security and Medicare now!

  20. Maes Cornelia says:

    Social Security has not added one cent to the national debt, yet it has been slandered and stolen from for decades. Congress has to be part of this program, otherwise these jackels only salivate at this safety net for the American taxpayers and unfortunates. Congress and Wall Street can’t wait to get their greedy claws into it. Social Security is part of what has kept this country from looking like streets of Calcutta – beggers, street people, child labor, garbage, uncovered sewers, loose dogs, cats, rats, cows, mobs.

  21. coffeecrimson says:

    Does it really matter who started stealing from the fund? It’s done. It’s gone. What do we do now?

Top