On March 22, the Senate defeated an amendment by Senator DeMint (R-SC) that would have made it possible under the Congressional Budget Resolution for the Congress to stop spending Social Security surpluses on other government programs and begin saving the Social Security surplus for future generations.
Finance Committee Chairman Max Baucus (D-MT) made it a party-line matter when he waved the bloody shirt of “privatization,” calling the DeMint amendment “smoke and mirrors” to privatize Social Security.
Only one Democrat, Claire McCaskill of Missouri, had the courage to buck the party line and vote “yea.”
Congress has been raiding the Social Security surplus for more than 20 years. Including interest, Congress has now spent $2 trillion of Social Security money on other government programs since 1984.
Congress pilfers the Social Security Trust Fund monies in two ways. First, it misappropriates annual payroll tax surpluses directly on other programs. Second, it avoids raising tax revenue or borrowing money from the public to pay the Trust Fund the interest it is due by giving it “special-issue” IOUs that do not show up as part of the national debt and are not backed by an adequate dedicated revenue source.
Between 2008 and 2026, when the Trust Fund is projected finally to be depleted, Trust Fund assets will increase each year due to interest and excess payroll tax revenues by a sum total of $3.9 trillion. If those monies were compounded at a modest 5.25 percent rate of interest, it would grow into a whopping $6.6 trillion by 2026.
If these annual increases in Trust Fund assets no longer were being raided and spent on other programs, they could instead be devoted to pre-funding a portion of future workers’ retirement. For example, the Trust Fund monies could be used to allow parents, grandparents and other concerned adults to open a Head Start Retirement Account for any child under the age of 18.
It’s painfully clear that the Congress is not yet prepared to stop playing games and lying to the American people about Social Security. Therefore, it is not too early to begin demanding that presidential candidates take the pledge to stop the raid and give the next generation a head start on retirement.