A startling revelation was just made by the Congressional Budget Office this week, but has been all but ignored by the mainstream media. Social Security is going into the red. For the last 25 years, Social Security has taken in more than it paid out every year. This is commonly referred to as the Social Security surplus; it keeps the system basically solvent. Last year however, the surplus virtually disappeared, dropping from $63 billion to only $3 billion, and it’s now projected that this year Social Security will go into the red. Social Security will begin paying out more than it takes in, and this puts Social Security itself at risk.
How did we get into this potentially disastrous situation? You guessed it, our leaders in Washington can’t control their profligate spending.
It began back in the 1960’s, during the LBJ Administration. President Lyndon Johnson and the Democratic Congress were trying to fight the Vietnam War, and pay for a whole slew of new, expensive government programs – the Great Society. Prior to this, Social Security funds had always been kept separate from the rest of the general funds, thus keeping Social Security safe from politicians in Washington spending it. The liberals controlling Washington at the time (today we’d call them “progressives”) combined the Social Security Trust Fund with the general fund and started spending Social Security money on anything they wanted to spend it on: the War, anti-poverty social programs, welfare, public housing, you name it. And it’s been that way ever since.
Later, some in Washington tried to change this to protect Social Security. The most serious attempt was legislation called the Social Security Preservation Act. This bill, if passed, would have required that every penny taken out of a person’s paycheck for Social Security, could only be spent on Social Security, and nothing else. (I was a strong supporter of passing this legislation, and I co-sponsored the bill a number of times.) Unfortunately, the big-spenders in Congress, both Republicans and Democrats, prevented the bill from being passed, and thus the spending continued.
Another attempt to put Social Security on sounder footing was President Bush’s proposal, shortly after he was re-elected in 2004, to allow persons to self invest, in a personal savings account, a portion of their Social Security contribution. It’s important to point out that these personal savings accounts were voluntary, and thus if a person didn’t feel confident in investing, he or she could continue to have all their contributions go to Social Security. It was projected that the additional money going into investments would have boosted the stock market and the economy, created more jobs, and most importantly helped to put Social Security on firmer fiscal ground. (There were some things I liked about the plan, others I did not.)
You remember the tumultuous town hall meetings many Democratic members of Congress faced this past summer over their healthcare plan; well, Moveon.org and other left-wing organizations had packed town meetings back in 2005, principally to oppose the Bush Social Security plan. They were successful, and the plan went nowhere.
The bottom line is, that since Social Security has been thrown into the same pot with the rest of the budget, the more out-of-balance the federal budget is, the more danger there is to Social Security. Even though Congresses in the past have failed to exercise sufficient fiscal discipline to ensure that we have a balanced budget, and therefore are not spending Social Security funds for other purposes, the present Congress has been without doubt, the most fiscally irresponsible in U.S. history, now having to borrow 45 cents for every dollar it spends. And what many of us warned would someday happen, that Social Security itself would be endangered by the out-of-control spending in Washington, is now happening. Our seniors deserve better than they’re getting out of Washington nowadays, and so do future generations of seniors. It’s time for a change.