Senator Bernie Sanders (I-VT) announced Thursday that he intends to introduce legislation when Congress reconvenes to “strengthen and preserve Social Security.”
How would he accomplish this? By taxing higher income earners. His proposal would “apply the same payroll tax already paid by nine out of 10 Americans to those with incomes over $250,000 a year.”
Sanders is concerned that the deficit “super committee” that was formed as a result of the debt ceiling agreement is going to cut Social Security benefits. “We are here today to send a loud and clear message to this super committee: do not cut Social Security,” said Sanders.
Sanders said in his statement that Social Security has been a wildly successful program, “the most successful government program in our nation’s history,” in fact. His announcement states that prior to implementation of the program, about half of the senior citizens in America lived in poverty. Today, less than ten percent live in poverty, all apparently because of Social Security. He also noted that more than 53 million Americans receive benefits from the program.
He then adds:
Social Security is the most successful government program in our nation’s history. It has not contributed one dime to the federal deficit. It has a $2.5 trillion surplus, and it can pay out every nickel owed to every eligible American for at least the next 25 years, according to the Social Security Administration. A recent report from the non-partisan Congressional Budget Office estimated that Social Security is in even better financial shape and can pay all promised benefits until 2038.
Some might disagree with Sanders’ unyielding optimism about the future of Social Security. Allen Smith, Ph.D. penned an article on FedSmith.com titled “No Money in the Social Security Trust Fund” in which he described how politicians have been raiding the Social Security coffers for years.
Smith said in his article, “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.”
So what Sanders said in his statement is technically true, assuming that the government can scrape together the money if pressed to pay the IOUs in the trust fund. With the national debt currently standing at around $14.6 trillion and growing, the government has already been forced to borrow from other places besides Social Security, such as federal employees’ retirement plans (the G fund) and the Civil Service Retirement Fund in order to hit the debt ceiling while Congress debated whether the ceiling should be raised given the rapidly growing debt accumulation. Given the growing debt, there are bound to be many skeptics out there, such as Smith, who might not buy Sanders’ argument.