AP FACT CHECK: Social Security’s funding shortfall adds to budget deficit in a roundabout way
Now that Social Security is paying more in benefits than it collects in taxes, there is a fierce debate among politicians, academics and advocates about whether those shortfalls are adding to the federal budget deficit.
The issue is important because the federal government’s annual deficit already exceeds $1 trillion, making any more borrowing tough to swallow. If Social Security is adding to the government’s financial problems, it becomes even more urgent to fix it.
“Over 77 years and now through 13 recessions, Social Security has not added one penny to our deficit or our debt,” Rep. Xavier Becerra, D-Calif., said at a recent hearing by the House Ways and Means Social Security subcommittee. Becerra is the top Democrat on the panel.
“I believe that Social Security has not contributed one nickel to the deficit because it is funded by the payroll tax,” Sen. Bernie Sanders, a Vermont independent who heads the Senate Social Security caucus, said in an interview.
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The Facts: Social Security’s shortfalls are adding to the federal budget deficit, in a roundabout way. One big reason: The rest of the government has been running such huge deficits over the years that it has spent all of the surpluses accumulated by Social Security.
Here’s how it works: For nearly three decades Social Security produced big surpluses, collecting more in taxes than it paid in benefits. The government, however, spent that money on other programs, reducing the amount it had to borrow from the public, including foreign investors. That’s why some advocates complain that Congress has “raided” Social Security.
full: http://www.washingtonpost.com/politics/congress/fact-check-social-securitys-funding-shortfall-adds-to-budget-deficit-_-in-a-roundabout-way/2012/08/12/5865d98e-e499-11e1-9739-eef99c5fb285_story.html
How about lifting the cap?
= new reply since forum marked as read
