Looting of Social Security

         William Greider on the Looting of Social Security

"What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in."

That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It's projected to have this year a 117 million surplus. I've got the schedule, I'll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem, we planned against that baby boomer problem. Our problem is we've been spending that particular reserve, that set-aside that you testify to that is so necessary. That's what I'm trying to get this government back to reality, if we can do that.

We owe Social Security 736 billion right this minute( 1998 ). If we saved 117 billion, we could pay that debt down, and have the wonderful effect on the capital markets and savings rate. 

Presidents Bill Clinton and George W. Bush have spent every dime of the surplus Social Security revenue flowing into the Treasury during their terms in office,  according to economist Allen W. Smith, Ph.D. in his new book, *Demystifying Economics: The Book That Makes Economics Accessible to Everyone.  Smith points out that the 1983 legislation, which substantially raised Social Security taxes, was designed specifically for the purpose of building up a surplus in the Social Security trust fund in preparation for the staggering new obligations the fund would face when the baby-boom generation begins retiring about 2010.  Instead, Smith reports that the government began using the surplus to pay for other government programs as soon as it first appeared in 1983, and it has continued to do so ever since. 

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