The Looting of Social Security: The So-Called Trust Fund "Bonds"

By on October 14, 2011 in Current Events with 70 Comments

The Social Security Amendments of 1983 included a hefty payroll tax hike that was designed to generate large Social Security surpluses for about 30 years.  These surpluses were supposed to be saved and invested in marketable U.S. Treasury bonds, which could later be resold to finance benefits for the baby boomers.  The plan was to build up a large reserve in the trust fund, during the surplus years, and then draw down the trust fund, during the deficit years, which began in 2010.

If the plan had been followed, the trust fund would now hold $2.6 trillion in good-as-gold marketable assets, which would be enough money to enable Social Security to pay full benefits until 2036.  But the plan was not followed.  Instead of saving and investing the surplus Social Security revenue, the money was put into the general fund and spent on wars and other government programs.  The spent money was replaced with government IOUs called “special issues of the Treasury.”  These IOUs are not marketable and cannot be sold or used to pay Social Security benefits.  They are nothing more than an accounting device to keep track of how much Social Security money has been spent for other purposes.

Prior to 1994, the IOUs consisted only of accounting entries recorded in government ledgers or stored on computers. However, some members of Congress began to worry that someone might actually demand to see the IOUs, so legislation was passed that required the physical printing of documents to serve as certificates of indebtedness.  Today, when a new IOU is issued, it is printed on a laser printer located at the Bureau of the Public Debt office in Parkersburg, West Virginia.  Once printed, the document is carried across the room and placed in a fireproof filing cabinet.  That filing cabinet is the closest thing to the mythical Social Security trust fund that exists.

Every dollar of the $2.6 trillion in surplus Social Security revenue went into the general fund and was spent on general government operations. None of it was saved or invested in anything.   Anyone can verify that none of the money was saved, or invested, by simply examining the federal budgets of the past 25 years.   If you add up the total federal revenue, including the payroll tax revenue, and compare the total with the total federal expenditures, including the payment of Social Security benefits, you will find that the federal government spent all of its general revenue, plus all of the Social Security surplus revenue, and still had to borrow massive additional amounts of money just to pay its bills.

For the past 25 years, the government has led the public to believe that the surplus Social Security money was actually being invested in government bonds, as it was supposed to be, when, in actuality, the money was spent as general revenue and was, therefore, not invested in anything.

The official Social Security website, which used to boldly state that all surplus Social Security revenue was invested in government securities, has been softening its language to more accurately reflect the truth.  However, their words continue to be misleading.  The current statement on the official website, with regard to what happens to Social Security taxes, states the following:

“Tax income is deposited on a daily basis and is invested in ‘special-issue’ securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.”

The Social Security Administration has come a long way from their earlier statements, which were extremely misleading. In the second part of the above statement, they admit that, the Social Security cash, “goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.”  This part of the statement is true. It describes what has happened to every dollar of the $2.6 trillion in Social Security surplus.

The first part of the statement, “Tax income…is invested in ‘special-issue’ securities” is not true.  If the money all goes into “the general fund of the Treasury,” it is all spent for general government operations. Thus, none of the money was saved or invested in anything.  The government “borrowed” the surplus money and issued “special issue” IOUs to account for the spent money.  The only ways that the government can redeem these IOUs are by 1) raising taxes, 2) decreasing other spending, or 3)  borrowing the money.

In the Summary of the 2009 Social Security Trustees Report, a single sentence, buried deeply within the report, spills the truth about the so-called “trust fund bonds.”  That sentence reads:

“Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.”

The above official declaration by the Social Security Trustees, that the IOUs provide no income to the Treasury, should make it clear that Social Security does not have any surplus money with which to pay benefits.  The government had to borrow $41 billion in 2010 so that full benefits could be paid, and it will have to borrow again this year, and in all future years.  Social Security continues to have the incoming flow of payroll tax revenue, but it is insufficient to pay full benefits.  All of the talk about Social Security being able to pay full benefits until 2036 is based on the myth that the Social Security surpluses were saved and invested as was the intent of the 1983 legislation.

© 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..

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  1. Bowie_63 says:

    The Post Office is an example of Congress attaching itself to any pot of money and then spending it on Pet Projects.  The idea of an IOU is criminal since these must be paid for with additional, new taxes.  The Government is currently spending more than it acccrues in tax revenue and even if all monies made by taxpaeyrs were confiscated the debt would continue to rise.  There is no fiscal responsibility in Congress or the Executive Branch since both are constantly running for re-election.  Without true oversight from outside of Congress on Congress, and the Executive Dept from outside of itself, there will never be any changes and any hope of a balanced budget are wishful thinking at best.  The mere idea that the millionaires in office would be required to pay back debts is never to occur.  They make the laws and they enforce them as thy want.  All of the talking and speeches are distractions as the Right and Left are one in the same, they are wasting taxpayer monies without any idea of repayment whatsoever.  Vote them and their staff out of office, start fresh.  It could not be any worse.

  2. G-Pa1 says:

    How did this article about the looting of SSI turn into a debate about the Post Office and the Unions?  This article is critically important to every American no mater how they earn their income, public or private.  Your retirement savings have been looted by our elected political officials!  Not just my lifes savings, but yours, your parents, your grandparents, everybodies investments have been looted in the Worlds Largest Ponzi Scheme Ever!!!  Get a life, it’s time to arrest and prosecute these thieves/liars and confiscate their personal fortunes!  Reposses their retirement savings and all their earned federal benefits!  Put the Thieves in PRISON!!!!

    • $24604893 says:

      There is a similar looting going on that is targeting the post office because Congress sees it as a source of ready cash. Congress is requiring the post office to prepay its retiree health benefit costs for 75 years in advance, ostensibly to protect the taxpayers from getting stuck holding the bag if the post office goes belly up. However, Congress is looting this money and replacing it with worthless IOUs so the truth of the matter is that requiring the post office to make these loans to the Treasury actually ENSURES that the taxpayers are left holding the bag whether USPS goes belly up or not! It is exactly the same situation as SSI and no complete discussion can cover only one while pretending that the same thing isn’t happening elsewhere. This unsound and irresponsible practice is bleeding the post office dry to satisfy Congress’ addiction to other people’s money. This entire practice of debt monetization has to be stopped. The postal unions have nothing to do with the issue.

  3. laserag says:

    “If the plan had been followed, the trust fund would now hold $2.6 trillion in good-as-gold marketable assets”
    Liar liar pants on fire!! Those “good-as-gold marketable assets” would be just another set of bonds – a stack of paper like any other set of bonds, representing debt. Tell the truth now, and shame the devil !!

  4. DStinnette says:

    THey are borrowing from our TSP next. It will be depleted

  5. Guest says:

    Thank you for shedding at least some light on the Congress stealing from the Social Security Trust Fund.  Unfortunately, the vast majority of Americans know nothing about this.  Where are the type of people in Congress that passed the 1983 legislation?  If only…

  6. retiredfed says:

    WAKE UP, FELLOW TAXPAYERS!!!!  We are the ones who now have to produce all the money for these promises.  The systems were looted by previous Congresses and the money used for God knows what exactly – more roads to nowhere and airports where no planes arrive, etc.  Anyway, Congress has NO MONEY except ours and we will have to pay.  Social Security has no funds, Civil Service Retirement has no funds, apparently, USPS has no funds for retirement either but they do have wonderful cheap health insurance.  We the taxpayers will now have to pay for all those wasted funds that were deducted from our paychecks and used by Congress as if they were income taxes paid to the general fund.  Perry was correct that Social Security works like a ponzi scheme even though it was not designed to work like one.  That is what it is now.  There are no funds except the money we pay currently into the Treasury. 

  7. James Hilderbrant says:

    Like but like most things our government has done for us, it ends up to be a dollar short and a day late. The Social Security program was never supposed to work in the first place FDR knew that and when LBL got in he made sure it wouldn’t work by grabbing on to it to balance or try to fund his “Great Society Program”. This like most liberal jibberish has led us down the road to debt and becoming a third world nation that is becoming a fact of life in the 21st century. The general fund owes this money and interest to the SS Fund so now pay up.

  8. Pmbasinger says:

    What a wake up call on how our own government has complete control of us and our money. Are we anything more than a slave?

    • Gpuchta1130 says:

      And more frightening yet is the fact that Wall Street has complete control of our government.  Are we more than slaves?  If we don’t soon wake up—not much!

  9. Working Fed says:

    So does this mean my EE savings bonds are also worthless?

  10. TonySoprano-1 says:

    As all ways..we get SHAFTED!!!! 🙁

  11. Pknd says:

    Since the elected officials(or appointed) caused this fraud upon the social security benefits, I suspect that there will never be an outraged congressional response demanding that those responsible be prosecuted..   Such as their involvement in steroids in sports.  An issue that they persued with great diligence. 

  12. Gordon4ward says:

    Outstanding article and clear explanation of the misleading attempts by the U.S. Government to trick the public into believing the Social Security ‘Trust’ Funds were somehow secure.  As a former SSA employee and manager for 33 years, I too believed the funds were somehow ‘special’.  But more importantly, as employees, we were told over and over these funds were invested and would provided ‘security’ to those who would collect in the future.  The ultimate irony, of course, is if a stock broker or individual took the exact same actions which congress has for 25 years, they’d be indicted and most likely jailed for fraud.

  13. Retired IRS says:

    Here is the bottom line, “we can’t cry over spilled milk.” How do we solve the problem ? We will have to meet the Social Security obligations promised to our citizens. This means taxes need to be raised. My suggestion is that the  part of the tax paid by the employer be raised. We can exempt small businesses who could be hurt by a payroll tax increase. Since businesses no longer provide annuities, I think that this is a fair proposal. In little Estonia, businesses pay a 31% payroll tax which far exceeds the 7.65% (Social Security and Medicare Tax) paid by employers in this country. In Germany, the payroll tax is closer to 50%. Germany has enlightened management and skilled workers who produce products the whole world wants to buy. This is the major American problem, we don’t produce many products the world wants to buy.

    • allenwsmithphd says:

      I believe we must “cry over spilled milk!”  That is why I have devoted the past decade of my life, and more than $30,000 in personal, borrowed money, to trying to expose the GREAT SOCIAL SECURITY THEFT.  What makes the crime especially horrific is that much of the $2.6 trillion, collected from workers through the regressive payroll tax, ended up in the pockets of the super rich in the form of cuts in the progressive income tax. 

      The richest 1 percent of the population took in less than 9 percent of the nation’s total income in the late 1970s.  By 2007, the richest 1 percent took in 23.5 percent of total income.  That is irrefutable proof that “class warfare” has been going on for a long time, and the rich have been winning that war.  I find it despicable that the Social Security program was used to transfer money from working Americans to the super rich.  Make sure you understand that none of that $2.6 trillion was used for Social Security in any way.  It was not used to pay either past or future Social Security benefits.  It was all used to replace the lost revenue resulting from the unaffordable income tax cuts that went mostly to the rich.

      I think it is time for the friends of Social Security to join forces with the “Occupy Wall Street” movement, using their own specifically worded picket signs.  How about signs that read, “GOVT. STOLE $2.6 TRILLION FROM S.S.!” “S.S. MONEY WAS STOLEN.  PAY IT BACK!”  “THE GREAT S. S. THEFT MUST BE CONDEMNED!”  “SAVE SOCIAL SECURITY.  END THE LOOTING!”  “WE WANT OUR STOLEN S.S. MONEY BACK!”  “THE S.S. TRUST FUND HAS BEEN ROBBED.  PAY IT BACK!”

      The crowds and the media coverage are already in place in cities throughout the nation.  There will be a lot of activity this weekend.  Why not make a sign, join the crowd, and take a stand for Social Security today!

  14. JA McNorton says:

    This and other articles by this author miss a very basic fact: the looting of the Social Security trust funds was made possible by a legislative change in the Johnson administration.  President Johnson asked congress to put the Social Security trust funds into the general treasury so the cost of the Vietnam war would be less obvious, and congress responded.  All these other actions since then have been expected consequences of President Johnson’s action.

    • allenwsmithphd says:

      It is not quite that simple.  LBJ did combine the Social Security budget with the general budget in 1968 but that action was reversed by the Budget Enforcement Act of 1990.  Since 1990, Social Security has been separate from the general budget.  What laid the foundation for the massive looting of Social Security was the 1986 payroll tax hike which has generated $2.6 trillion in surplus Social Security revenue that was supposed to be saved and invested for the baby boomers.  Between 1935 and 1983 there was very little surplus revenue to loot. In 1968, the year that LBJ added Social Security to the general budget, there was a Social Security surplus of $2.6 billion which Johnson looted.  In 1969, LBJ’s last opportunity to spend Social Security money on other things, there was $3.7 billion in Social Security surplus. These small surpluses were offset by eight annual deficts between 1976 and 1983.  The net result was that, between 1968 and 1975, the government ran surpluses in eight years, totaling up to $20.2 billion.  However, it also ran deficits between 1976 and 1983 totaling up to -$26.2 billion.  Over the entire period, 1968 to 1983, the Social Security fund ran a net deficit of $6.0.  So, although Johnson looted some Social Security surplus in 1968 and 1969, over the entire period of 1968-1983 there was no net looting.  It was enactment of the 1983 payroll tax hike that opened the door to the Social Security vault, much to the delight of crooked politicians from both parties.

  15. Frederick Lockhart says:

    I have read Professor Smith’s position on the Social Security Trust Funds’ Treasury Bonds and reacted to it online in writing before.  Some of his information is really good, particularly his history of the employment taxes and the borrowings from the Social Security surpluses.  But Professor Smith is not a lawyer and thus suffers from a confusion of economics with legal concepts.  A debt is a debt and a government bond is a government bond.  Whether or not the government has the ability to pay the same currently does not affect the legality of the debt.  If we extend his logic, all other Treasury bonds suffer from the same financial uncertainty.  However, not even Tea Partyers advocate the position that even an arguable government insolvency can somehow be used to zero-out the liability of the federal government on its publicly-held Treasury bonds.  The fact that the Social Security bonds are nonnegotiable may further affect their liquidity, but that does not change the liability.  As a lawyer, I’ll personally take on the reduction of any past-due Treasury bonds payable to to Social Security to judgment and the collection of the same for a very small contingency fee, say 1/2 of 1%.  I won’t even have to try the case; I’ll win on a motion for summary judgment.  Further, the federal government has a lot of inter-agency receivables/payables, and guess what, when the obligor is the Department of the Treasury,  all of the obligation (including the one evidenced by the Treasury bonds held by the Social Security trusts) is included in the national debt.  Whatever that total debt number is right now (say $15 trillion), I guarantee you that it includes the approximate $2.6 trillion owed to the trusts.  I have never heard a Secretary of the Treasury nor an OMB Director, regardless of party affiliation, take the position that the Treasury bonds held by Social Security are worthless IOUs that don’t have to be paid nor that the debt ceiling has not been reached because the total federal government debt is overstated by $2.6 trillion, or whatever the total amount is for Treasury bonds owed to Social Security.  Professor Smith is just plain wrong about the bonds.

    • allenwsmithphd says:

      In a 1960 ruling (Fleming v. Nestor)  by the United States Supreme Court, the court ruled that nobody has a “contractual earned right“ to Social Security benefits. Section 1104 of the 1935 Social Security Act specifically states, “The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.” According to the above strong language, Congress could do whatever it wanted to do with regard to changing or even eliminating Social Security.

      As a result of the 1960 Supreme Court ruling, the future of Social Security is totally in the hands of Congress and the President. They have the legal authority to amend any and all parts of the Social Security Act, as well as the authority to either increase or decrease Social Security benefits. The government can default on its debt to Social Security, if it chooses to do so, because that debt is not in the form of real marketable bonds. It is a different category of debt, and a government default on that debt would not have a major adverse effect on holders of public-issue marketable Treasury bonds which the government can never default on. 

      Based on the above, and another Supreme Court rulling, FICA contributions are viewed by the Court as taxes.  Thus tax revenue generated by FICA taxes legally belongs to the government and the government can do whatever it wants to do with that revenue.  I have consulted a lawyer about the possibility of a class action lawsuit to recover the stolen money.  He said such a suit would go nowhere because of the Supreme Court’s rulling in Fleming v. Nestor.  If the surplus Social Security revenue had been saved and invested in marketable Treasury bonds, as was the intent of the 1983 legislation,  the Social Security Trustees could sell the marketable bonds at will, and there would be no way the government could cheat Social Security beneficiaries out of their rightful retirement benefits.  But the money was stolen in what I consider to be one of the major crimes of the Century.  

      • Frederick Lockhart says:

        Of course, Congress can change Social Security benefits at any time by enacting modifying legislation because the Social Security Act itself authorizes it.  However, the character of the assets held by the trust funds would not change the impact of any such legislation.  It would not matter whether the trust funds were holding cash, marketable bonds (or other marketable securities) or nonnegotiable bonds.  Professor Smith, you suggest, if not state, that it would.  What is really at issue, here, are the purposes of the trust funds.  The trustees have either specifically legislatively described fiduciary responsibilities or fiduciary responsibilities legally imposed under general trust law concepts to their beneficiaries, which means that they hold whatever assets they have subject to these duties.  Because not every citizen, nor even every taxpayer, nor even every employment tax taxpayer is entitled to Social Security benefits, there is a difference between trust fund beneficiaries and the general United States public.  You cannot qualify for Social Security retirement benefits unless you have contributed to the retirement fund through payment of employment taxes for a minimum of 40 qualifying quarters.  You cannot qualify for disability benefits unless you are permanently and totally disabled and meet the employment tax payment requirement for a specific period of time prior to becoming disabled.  The reason that there is an obligation by the Treasury Department to the Social Security trust funds to repay the borrowed funds in the first place is because funds from taxes imposed for specifically dedicated purposes were expended to satisfy general fund obligations.  Let me suggest to you that the theft of the Social Security surpluses has not yet occurred because the funds were borrowed and not confiscated.  If and when the resulting debts (primarily Treasury bonds) are not repaid or are reneged upon, there will be plenty of us who will be willing to take a shot at forcing the government to make good on its promises to repay, regardless of what the modifying legislation says, and force the trust fund trustees to distribute those funds to the trust fund beneficiaries.  And by the way, the time to complain about a theft will be when there is an impending theft if and when Congress proposes legislation to totally gut Social Security and take the borrowed funds in the process or if and when we have an administration that asserts that it has the ability to do so unilaterally.

  16. Guest says:

    Allen continues his 1/2 truths about SS. Yes the SS act of 1983 raised the rates for the taxpayer as well as the employer but WHY??? The reason was the unitary budget that was passed in 1965 that took a stand alone SS trust fund and combined it with general revenues. Why did LBJ and the Dem’s do this why to fund the Great Society programs.
    Of course Allen fails to mention that since 1983 congress has included illegals, those who never contributed and SSI for those under 18  which also funds cars TV’s computers over and above the normal SSI

    • allenwsmithphd says:

      Dear lazyfed,

      Would you please be so kind as to specifically point out which of my statements you consider to be 1/2 truths so that I can address them?  I have devoted the past ten years of my life to researching and writing about Social Security funding and I am an equal opportunity blamer when it comes to Republicans and Democrats.  For the past 25 years both parties have been equally guilty of looting the Social Security fund and using the money as general revenue.  With regard to how much Social Security money that LBJ looted, it was $6.3 billion over a two-year period.  From 1935 to 1983 Social Security operated on a strictly pay-as-you-go basis so there was never much surplus money to loot prior to the hefty payroll tax hike of 1983.  I’m sure LBJ would have looted a lot more if he could have.  Compare that $6.3 billion to the $183.3 billion which President George W. Bush looted during his last year in office, or the approximately $1.5 trillion that he looted during his eight years as president.  Also remember that Bill Clinton looted every dollar of the surplus during his 8 years in office.  It was the 1983 payroll tax hike that laid the foundation for the greatest fraud ever perpetrated against the American people by their own government.

      • Guest says:

        The SS act of 1983 under Reagan increased funding but required that spending cuts be $3 for every tax dollar raised. Under Bush 1 the same game was played by the dems where there was supposed to be $2 in cuts for every dollar in new taxes. Once again the dems used that ruse and never cut 1 dollar. On both occasions federal spending went up not down. As for the current office holder  $5 Trillion was looted from even non citizens not to mention the $10Trillion that the Fed has also looted 

  17. Hawkroost99 says:

    How are the “special-issue securities” different from treasury bonds?  Aren’t they both obligations to pay?

    • mycroftt says:

      The special issues are non-marketable so they can not be sold to investors on the open market. The agency that holds them can only get its money back from the Treasury, not by selling them. So they have no market value but still retain their face value.

  18. Mathew says:

    The additional interesting fact is that the proposed Jobs Act and other legislation that resulted in a reduction to the “payroll tax” actually reduced social security tax payments (the employees share) by 2% in 2011 and is proposed to continue to reduce the employees share in Social Security.  Not only has the tax not been invested as required it has been reduced and is being sold as a payroll tax reduction when in fact it continues to compromise the entegrity of the Social Security system.

  19. pappyg says:

    A trip inside the world of Social Security (a senator confesses) http://bit.ly/oyXoDV and a journey into the future of Social Security: http://bit.ly/nhyWGs  Talking time has passed us by, and walking time is at hand!!!

  20. Ready2Retire says:

    It’s time for a class-action suit against Congress to require them to replace the money stolen and provide undiminished benefits to those of us who paid for it.  It is stolen because it was used for purposes other than those intended by the social security taxes paid.

  21. Jaia says:

    I think this argument is misleading. If the SS payments had gone into marketable treasury bonds rather than the special issue bonds, the money still would have gone into the general fund, with interest and redemption financed by tax revenues.

    • allenwsmithphd says:

      The funds were supposed to be invested in pre-existing marketable Treasury bonds, purchased in the open market.  If that had been done, none of the money would have gone to the government.  The money would have gone into the pockets of those investors from whom the government purchased the pre-existing bonds–people  like Warren Buffett, Bill Gates, and the Chinese government. This would have had the effect of paying down $2.6 trillion of the national debt over the past 30 years.  As the government resold these bonds, to raise money with which to pay benefits to the baby boomers, the $2.6 trillion that had been paid down would have been reborrowed. 

  22. Kitty_Katch says:

    And now the Congress wants to reduce benefits so they are not forced to pay back the $2.6T plus interest. Talk about a double-whammy.

    • allenwsmithphd says:

      You hit the nail on the head.  If the $2.6 trillion had not already been spent, Social Security would be fully solvent for another 25 years, and Social Security would not even be in the news at this time.  The news media does not report, and almost nobody knows, why Social Security is under attack at this specific time.  It is because, after nearly 30 years of consecutive annual surpluses, Social Security ran a deficit of $41 billion in 2010.  Since there was no money in the trust fund, the government had to come up with the $41 billion out of the general budget. This sent some politicians into a panic mode.  The only way full Social Security benefits can be paid in future years is for the government to take money from the general fund to pay back some of the stolen money.  The politicians do not want to repay the benefits, so they are trying to cut benefits so the money will not have to be repaid.  

  23. steve5656546346 says:

    This is all true.

    Also true–and also buried deep within the SSA website–is this simple fact.  From the beginning, Social Security was not an investment program.  From the beginning, those who were working supported those who were retired.  People used to have a lot more kids than they do now:  and now we have many fewer workers for each retiree.

    The amendments referenced in the article took advantage–which was wasted–of a fluke:  there were a LOT of baby boomers at their peak earning years during this period…and not all that many retirees.  This did permit a temporary surplus.  But not a truly long term solution.

    • Cab1918 says:

      Don’t foget the 50 million plus babies aborted plus their potential offspring would be paying Social Security taxes to support the retiring generation.   Boy, is man so smarter than God.

      • grannybunny says:

        And who would pay for their Social Security benefits?  There are many potential fixes for Social Security — stopping the looting being an obvious start — but continuing to bring more unwanted children into an already overpopulated World is not one of them.

  24. Ptwocat says:

    WE should expect Congress to pay back every single cent plus interest even if Congress (those who are millionaires) must pay back from their own pockets and the pockets of the ultra wealthy (Congress friends, family, and lobbiest including but not limited to WALL STREET) who profiteered from spending SS and other reirement funds!!!!!

  25. Ds22191 says:

    and these are the same guys who want to get a hold of out TSP “to help us out” LOL!

  26. mycroftt says:

    GAO has only yesterday issued a report stating that the government will not repay the Postal Service for overpayments into its pension funds (that Congress used for other purposes) amounting to $50 – $75 billion because repayment is a matter of “policy” made by Congress. If Congress will not pay back $50 billion it took and spent for other purposes, why would anyone expect that it would pay back $2.6 trillion?

    • Guest says:

      YES WE should expect Congress to pay back every single cent plus interest  even if Congress (those who are millionaires) must pay back from their own pockets and the pockets of the ultra wealthy (Congress friends, family, and lobbiest  including but not limited to WALL STREET) who profiteered from spending SS and other reirement funds!!!!!

      • Guest says:

        I have no problem with that. Its time to defund the govt starting with eliminating total depts:
        state
        education
        Commerce
        Interior
        NIH
        1/2 of Justice

        • Retired IRS says:

          I assume that your agency (if you are in fact a federal worker) was not included on your list. Let’s see no State Department, so I guess the US is to have no foreign policy? No Interior Department, what happens to the one million square miles of land that the government owns, the National Parks etc. I could go on and on, but you get my drift.

          • Guest says:

            Just what foreign policy do we now have?? gates ended up running DOD as well as State since Hilary just like barak is totally incompetent. Notice that gates got over ruled in Libya and now their weapons are loose and terrorists are buying them up.
            Interior hmmm who was responsible for over seeing deep water drilling?? have you ever been to a federal run facility even the Nazi’s were boy scouts compared to the crews that work the parks.
            I get your drift and that’s why I made my statement

          • Animosity4u says:

            Oh but GW was the soul of intelligence?  You are laughable!

    • grannybunny says:

      And yet, many of the people outraged at the looting of the Social Security Trust Fund, blame the Postal Service for its current financial difficulties, when Congress has done virtually the same thing to Postal retirement funds and prepayments for future retiree health benefits.  In both situations, Congress created the problem, and Congress can — and needs to — fix it, ASAP!

      • steve5656546346 says:

        The two claims are not mutually exclusive.  The fact that Congress created part of the problem does not prove that the Postal Service is not ALSO mismanaged.

        • mycroftt says:

          The Postal Service is absolutely mismanaged because Congress makes decisions about its costs and its revenues. The Postal Service does not have to authority to regulate them. Maybe it would be more accurate to say the Postal Service is nonmanaged. Congress created 100% of the Postal Service’s current liquidity problem and 100% of the Postal Service’s current debt.

          • Guest says:

            The postal service problems are the result of allowing the unions to run the show and they have run it into the ground. Just go to any postal website and you’ll get a real feel for what the attitudes are of postal employees. They deserve to lose their jobs

          • mycroftt says:

            That is patently ridiculous. The unions have no authority whatsoever other than negotiating wages, benefits, and working conditions and representing the employees in disputes with the employer. They have no decision making authority at all.They can’t even call for job actions – stalled negotiations, by law, go directly to binding interest arbitration. Wherever do you folks get these bizarre notions about the postal service?

          • Guest says:

            Really?? Really?? The unions have forced the USPS to maintain work rules that date back to the 1920’s. Even janitors have a prescribed set of rules which forces feather bedding. Binding arbitration doesn’t require that the USPS ability to pay are entered in the decision process.
            Its time you and your fellow union goons come down to reality because your jobs are GOING AWAY, The only response you ever hear from a PO employee is “grieve it” heck there isn’t even a requirement that they deliver the prescribed mail in 8 hours

          • Fed worker bee says:

            “Really?? Really?? The unions have forced the USPS to maintain work rules that date back to the 1920’s.”
             
            And that’s only because USPS management agreed to keep those work rules.  There’s a reason why it’s called ‘collective bargaining’ – the two sides have to agree before the contract can be put into place.  Unions cannot force management to do anything; management has to agree to go along with it.  In this case, management made a conscious, purposeful decision: it was easier to go along with the union demands for antiquated work rules than it was to stand up to the union and effect changes.  You can blame the unions all you want, but unions cannot take what management is not willing to give – and I say that as someone who has been on both sides of the labor-management debate over the years.

    • Gnatman says:

      The following chart shows the national debt and the money which has been borrowed from several trust funds as of January 1, 2010:
      Total National Debt:                                                                                        12,298,936,000,000
      Public Debt – Owed to individuals, banks, foreign entities:                                    7,811,009,000,000
      Intergovernmental Debt – Owed to federal trust funds:                                         4,487,927,000,000
      Owed to selected trust funds:
      Social Security Trust Fund (includes disability):                                                    2,518,540,000,000
      Medicare Trust Fund:                                                                                             304,612,000,000
      Federal Civil Service Retirement:                                                                            750,208,000,000
      Military Retirement:                                                                                               295,792,000,000
      Source: U.S. Treasury

    • Guest says:

      No the report said there was NO overpayment and was actuarial sound. In addition the report said that the PO’s lack of profitability isn’t due to pension payments but to wages and unions 

      • mycroftt says:

        That is not what the report said. It recognized the actuarial soundness of the independent studies and the USPS OIG. Wages and unions were outside the scope of this study and GAO absolutely did not say what you are claiming they said. Maybe I missed it – I have only read the report in its entirety twice and referred to it many dozens of times. It’s possible they made that finding in another report (of which they have published many) but it does not seem to be in this one. The report said that the payments were in accordance to the law, which was never in dispute.

        • Guest says:

          Obviously you didn’t read the report try it and then get back to me. Apology accepted in advance

          • mycroftt says:

            Try reading the report please. You are uninformed and base your statements on ideology rather than on what was published. Frankly, I do not find such low level discussion valuable at all. If you read the report and can raise your game please add something valuable to the discussion.

          • Guest says:

            Try to stay on topic since you obviously have 0 reading comprehension

  27. Acountant_DOE_Retired says:

    Right wing propoganda. All loans are made on the basis of the ability of the borrower to pay it back and the money is always spent weather the borrower is government, corporations, or individuals. The Republicans are saying this because they dont want to pay back our loans and want to cut taxes for the rich. It averages about 300 billion a  year or 15% of or govenment expenditures. Just cut the military in half (we still will have 1/3 of all the worlds military) and it’s done.

    • allenwsmithphd says:

      Money can be spent or saved.  If it is saved, it can also be invested.  The government was not supposed to spend any of the Social Security surplus revenue.  It was all supposed to have been saved and invested in pre-existing marketable U.S. Treasury bonds.  These assets are as good as gold and can be sold at any time.

    • Taxpayer1 says:

      did you even read the article?

  28. HRguru says:

    Government: “You screwed up. You trusted us!” 

    I guess a system that relies on government promises is inherently flawed, and we should adjust accordingly. 

    • HRguru says:

      Would that we remembered this before we were promised universal healthcare on the cheap, however.

      • Animosity4u says:

        Grow up — if a right wing nut case can somehow find a way to blame the current administration for the problems that started with the REAGAN administration it always will!  Geez – you people never learn!

        • HRguru says:

          So we should look at the social security debacle as evidence that the government can be trusted with more programs, right?  Regardless of the composition of the government and Congress, all of this took place. 

          Good strawman argument and nonsequitur though, all in one barely coherent sentence. Impressive.

        • Guest says:

          Gee did Reagan promise universal healthcare?? did Reagan spend the $$$??
          You only need to look at the deficits over time and look who controlled congress 90% of our $14Trillion deficit was under DEM’s

        • Guest says:

          Hardly ALLLLL of our current problems started under LBJ and his war on poverty and Great Society that attempted to mimic Cuba

  29. Fed Peasant says:

    Bernie Madoff must be howling with laughter, & rolling in the floor of his prison cell right now!!  Release Madoff & incarcerate the right people this time.

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