how much money has the congress 'borrowed' from the social security and medicare trust funds

How much has the government borrowed from the Social Security Trust Fund?

The Congress, those keepers of the financial retirement flame, have been using Social Security taxes to fund other parts of the government because, well the money is there. Technically the government owes the Social Security fund an estimated $2.9 trillion, money that has been used and not repaid to the fund.

Did Congress misappropriate $2 trillion from Social Security?

 · Unfortunately, Congress saw that surplus and decided to borrow and spend it. It was all very legal. In fact, the United States Treasury even created special bonds to to show how much money they owed to Social Security. Over the next thirty years, that surplus grew to almost $3 Trillion. And Congress continued borrowing it.

Did Bush borrow $1 trillion from social security to pay for war?

The government has borrowed about $22 trillion from various sources ranging from individuals with savings bonds to banks with surplus cash to corporations seeking to invest surplus cash to social security and medicare surpluses to foreign governments with excess dollars they want to store in a safe place.

Is borrowing from Social Security the same as stealing from it?

OASI - $2.5241 trillion. DI - $153.9 billion. However, instead of cash, these two trust funds have IOUs from the US government. All of those assets are held in "special non-marketable securities of the US Government". So, the US government borrows from the OASI, DI and many others to finance its deficit spending.

Did Congress steal from Social Security?

Myth #5: The government raids Social Security to pay for other programs. The facts: The two trust funds that pay out Social Security benefits — one for retirees and their survivors, the other for people with disabilities — have never been part of the federal government's general fund.

How much did Congress borrow from Social Security?

The total amount borrowed was $17.5 billion.

How much money does the government owe the Social Security Trust Fund?

The Treasury owes $106 billion in interest on the securities held by the trust funds. If those securities had been held by the public, the interest payments to the holders of the securities would have been cash payments, and the total borrowing requirement would have been $808 billion (see Table 1, inset B).

Has the government borrowed money from Social Security?

The Social Security Trust Fund has never been "put into the general fund of the government." Most likely this question comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting.

What president took money from the Social Security fund?

President Lyndon B. Johnson1.STATEMENT BY THE PRESIDENT UPON MAKING PUBLIC THE REPORT OF THE PRESIDENT'S COUNCIL ON AGING--FEBRUARY 9, 19647.STATEMENT BY THE PRESIDENT COMMENORATING THE 30TH ANNIVERSARY OF THE SIGNING OF THE SOCIAL SECURITY ACT -- AUGUST 15, 196515 more rows

When did Social Security become an entitlement?

The Social Security Act was signed into law by President Roosevelt on August 14, 1935. In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement.

How much money has the federal government borrowed from the Social Security Trust Fund and owes the trust fund to pay for other federal programs?

Let's look to the most recent "Monthly Statement of the Public Debt of the United States" (courtesy of TreasuryDirect.gov, *. pdf) to get the answer. So, that's almost $2.6 trillion for the Old-Age and Survivors Insurance trust fund, plus an additional $140 billion or so for the Disability Insurance trust fund.

Why is the Social Security Trust Fund depleted?

Part of the reason for the stable depletion date is the higher mortality rate from COVID-19, which reduces some long-term care costs, offset by higher expected healthcare costs for people weakened by the virus, a Department of Health and Human Services official told reporters.

Where does excess Social Security money go?

Generally, for of every dollar you pay in Social Security taxes: 85 cents goes to a trust fund that pays monthly benefits to retirees and their families. That works out to an average monthly benefit of $1,430.73 or $17,168.76 a year. 15 cents goes to disabled benefits.

What will happen when Social Security runs out?

Reduced Benefits If no changes are made before the fund runs out, the most likely result will be a reduction in the benefits that are paid out. If the only funds available to Social Security in 2033 are the current wage taxes being paid in, the administration would still be able to pay around 75% of promised benefits.

How much money does the government owe to the Social Security Fund?

Technically the government owes the Social Security fund an estimated $2.9 trillion, money that has been used and not repaid to the fund. The money is legally held in a special type of bond that by law cannot be used for any other purpose other than to put the money back into the fund.

How does Social Security work?

What many people don’t know is how Social Security actually works. There is no cash in the bank to pay out monthly benefit checks. The Congress, those keepers of the financial retirement flame, have been using Social Security taxes to fund other parts of the government because, well the money is there. Technically the government owes the Social ...

Do millennials pay taxes?

Millennials and younger generations complain they are paying their taxes in just to finance the 63 million retirees, about half who depend on their Social Security check to pay part or all of their monthly bills. But when looking at that $2.9 trillion owed to the fund, and the fact that the fund actually has more money going in than coming out, the problem clearly lies with the government’s addiction to spending. Money is the drug of choice in Washington D.C., and whoever gets elected will get their fix sooner or later.

What would happen if the lottery inflow was reduced?

If the lottery inflow was reduced because of lower sales, then the general education allotment would suffer because there is no alternative source of funding. The Social Security program suffers from the same problem except on a much larger scale.

Will Social Security be cut in 2034?

There is an ongoing debate about whether the Federal government and its spending policies are responsible for the current projections that by the year 2034 the outflow of payments will exceed the inflow of tax revenues to fund the social security program. The latest report of June 2018 says there it will become necessary to reduce benefit checks by as much as 21 percent to keep the fund solvent. This number could actually be higher if inflations gets out of control or a reduction in tax revenues further reduces the amount of cash available.

Is the $2.9 trillion problem the government's fault?

An odd thing is taking place in some financial and economic circles, where people are arguing that the problem of the $2.9 trillion is somehow not the government’s fault and is really not that big of a deal. The clock is running and no one seems to have a solution, yet all admit the government does owe the Social Security fund the money and that the government continues to borrow from the fund every year. Maybe many of these so-called experts won’t be around in 2034 and can act as if the problem is not really a problem. The real problem is that neither the average person or the accountants and financial planners in the government actually understand what $1 trillion is in real money. Maybe someone could make $1 trillion in dollar bill sized pieces of paper and have them delivered to the Congress. But that would cost too much.

How much interest did Social Security get in 2018?

In 2018, $83 billion in interest income was collected by Social Security. If the folks who believe that Congress stole from Social Security got their way, and the federal government repaid every cent it borrowed, Social Security would have lost out on this $83 billion in interest income in 2018.

When was Social Security on budget?

First of all, there's the period between 1968 and 1990, which is believed to be when Congress pilfered America's top social program. What needs to be understood here is that, while Social Security's two trusts (the Old Age and Survivors Insurance Trust and Disability Insurance Trust) and its asset reserves were technically "on-budget," funding for Social Security and payouts remained entirely separate entities from the federal government's General Fund. In plainer English, think of money within Social Security's sphere as being completely untouchable by other money in the federal budget. This means at no point over this 22-year period where Social Security was on-budget did a dime of Social Security income, benefits, or asset reserves get commingled with the federal government's General Fund.

What has Congress not done?

What Congress hasn't done is steal from Social Security. However, lawmakers have known of the program's shortcomings since 1985, and have yet to find a middle-ground solution to fix it. If you want to point the finger at lawmakers, do so because bountiful solutions exist, but political hubris appears to be getting in the way.

Is the federal government paying interest on Social Security?

Rather, the federal government is borrowing capital that would otherwise be losing money to inflation and paying interest into the Social Security program on its borrowing. Yes, you read that correctly. Not only is every cent the federal government has borrowed from Social Security accounted for, but the government is paying interest ...

Is Social Security money untouchable?

In plainer English, think of money within Social Security's sphere as being completely untouchable by other money in the federal budget. This means at no point over this 22-year period where Social Security was on-budget did a dime of Social Security income, benefits, or asset reserves get commingled with the federal government's General Fund.

When did the Reagan administration remove Social Security?

In 1983 , the Reagan administration voted to undo this change and once again remove Social Security from the federal budgeting process. This was done to ensure that changes made to the program are done solely on the merits of the program, and not to balance the federal budget.

What was the President's Commission on Budget Concepts?

Prior to 1974, before Congress had an independent budgeting process, the President's Commission on Budget Concepts had three separate budgets, all of which had differing deficits. To simplify things, Johnson called for Social Security and its trust funds to be included in the annual federal budget. In 1983, the Reagan administration voted ...

Did the Greenspan Commission raise Social Security?

Yes. In 1983, The Greenspan Commission came up with a plan to save money to provide for the retirement of the Baby Boom Generation. President Reagan and the Democrat-controlled Congress agreed with the plan and raised Social Security withholding which immediately resulted in a large surplus in the Social Security Trust Fund.

Did Congress borrow and spend Social Security money?

Unfortunately, Congress saw that surplus and decided to borrow and spend it. It was all very legal. In fact, the United States Treasury even created special bonds to to show how much money they owed to Social Security.

Is the Social Security Trust Fund empty?

Now, the Social Security Trust Fund sits empty — there isn’t enough money to pay the benefits that are owed this year. But there is a file cabinet in Parkersburg, West Virginia filled with those special bonds the Treasury issued to replace the money in the Social Security Trust Fund

How much money has the government borrowed?

The government has borrowed about $22 trillion from various sources ranging from individuals with savings bonds to banks with surplus cash to corporations seeking to invest surplus cash to social security and medicare surpluses to foreign governments with excess dollars they want to store in a safe place. In this sense, the government acts like a large bank. The dollars are not just created arbitrarily. There are complex rules in place because arbitrary generation of dollars would devalue the dollar and result in rampant inflation. (Many people fail to understand this and seem to believe that money is just generated when needed. Not true.)

Why is the Social Security surplus declining?

The portion of that $22 trillion that has been borrowed from the social security and medicare surplusses will vary each year and has been declining recently because those surplusses are being spent down due to longer life expectancies and the relatively large number of retiring baby boomers.

Does the government have to pay taxes to spend money?

The US government creates the nation’s money when it spends, which means that the government does not require taxes in order to have money to spend. Almost all money exists as electronic entries on spreadsheets at the Federal Reserve. The physical dollars we hold amount to about 10% of all currency give or take a few percent, the rest exists as electronic balances in our bank accounts or other electronic forms.

Can the government save money?

In our economy today there is no other possible - reasonable - answer to this question. The government can’t “save” US dollars either by not spending or setting aside money.

Can the federal government borrow from itself?

I’m not sure that the term “borrowed” would be a valid way to think about this question. Just as you can’t “borrow” from yourself, the federal government can’t borrow from itself. It can create liabilities for itself, however.

Is Social Security a drain on income tax?

The assertion that Social Security and Medicare entitlements are huge drains on the revenue stream from income taxes is true, but this assertion is also fundamentally dishonest.

Is it a problem that the government has borrowed money from Social Security?

A key point is that it is NOT a problem that the government has “borrowed” this money from the social security and medicare surplusses. They could easily borrow it elsewhere if needed. The real problems are these:

What would happen if Congress didn't borrow from Social Security?

If Congress were no longer allowed to borrow from Social Security, this expected depletion date would almost certainly move forward. In the end, you don't have to agree with or like the practice of Congress borrowing from Social Security, but you do need to understand its importance from a factual perspective.

How much money did Social Security generate in 2017?

In 2017, the interest income from Social Security's asset reserves generated $85.1 billion of the $996.6 billion collected by the program. Over the next decade, more than $800 billion in income will be derived solely from the interest earned on Social Security's asset reserves. If Congress simply stopped borrowing from the program, this money would disappear.

What would happen if Congress were to pay everything?

Long story short, if Congress were to "repay everything," the program would have the exact same amount in asset reserves ($2.89 trillion) as it has today. It wouldn't put the program on any better footing than it is now. In fact, as you'll see in the next point, it'd actually make things worse.

Does the SSA have to purchase bonds?

Instead, law requires that the Social Security Administration (SSA) purchase special-issue bonds and, to a lesser extent, certificates of indebtedness with this cash. These bonds and certificates of indebtedness have various maturity dates and yields, depending on when they were purchased.

What do you need to know about borrowing money from Social Security?

Below are the three things you really need to know about Congress borrowing money from Social Security. 1. It's a loan (by law) and not theft or a raid. Social Security's asset reserve is nothing more than the sum of the program's net cash inflow since inception.

Why are there so many misconceptions about Social Security?

But if there's one myth that appears to supersede them all, it's the belief that Congress has stolen or raided Social Security's asset reserves and absconded with the money .

Is Social Security important?

Whether you realize it or not, Social Security is unquestionably our nation's most important social program. Each month, 62% of aged beneficiaries lean on their monthly check to provide at least half of their monthly income, with about a third relying on their payout for virtually all of their income (90%-plus). Without Social Security, elderly poverty rates would probably be through the roof.

How much money does the government borrow from Social Security?

The amount of money the federal government has borrowed from the Social Security trust fund, the Medicare trust fund and other government agencies just crossed the $5 trillion mark. Politicians downplay the number, saying it isn't really debt; it's money the government "owes itself.". But the bulk of that $5 trillion doesn't belong to ...

How much money does the government need to make to make good on its promises to retirees?

Long-term, the federal government will need to come up with over half a trillion dollars per year to make good on its promises to our retirees. But it won't come up with the money. Raising over half a trillion dollars in revenue would require either raising taxes by 30% or doubling the current deficit.

When will the rules change for Social Security?

And it will change the rules again sometime around 2020. Congress is a unique risk to which private retirement accounts are largely immune.

Is Social Security privatized?

Expect to see it soon. For decades, economists have called for Social Security to be privatized. Opponents said that privatization would be foolish because financial markets are risky while Social Security is safe because the Social Security trust fund invests only in U.S. Treasury Bills.

When will the $5 trillion end?

According to the Social Security Board of Trustees, Social Security's unbroken string of budget surpluses will come to a permanent end in 2020. From then on, not only will Washington have lost a major source of cheap financing, the money will need to start flowing in ...

Does the $5 trillion debt belong to the government?

But the bulk of that $5 trillion doesn't belong to the government. It belongs to current and future retirees. The only way this debt "doesn't count" is if the government has no intention of paying its obligations to America's retirees. That $5 trillion is going to come back to haunt us, and soon. According to the Social Security Board ...

Does Social Security give back money?

That is true, but it turns out that it was only part of the truth. While the law requires Social Security to invest its surplus in Treasury Bills, the law does not require Social Security to give taxpayers their money back. At any point Congress can change the rules of the game.

How much interest did Social Security collect in 2018?

Williams also pointed to the billions in interest that Social Security collected. “In 2018, $83 billion in interest income was collected by Social Security,” he wrote. “If the folks who believe that Congress stole from Social Security got their way, and the federal government repaid every cent it borrowed, Social Security would have lost out on this $83 billion in interest income in 2018.”

Is borrowing from Social Security the same as stealing?

However, AARP clarifies that borrowing from Social Security isn't the same as stealing from Social Security. “The government has always made full repayment, and the interest increases Social Security's assets, to the tune of more than $80 billion in 2019 alone,” the organization asserts.

Can the government spend the proceeds of a Treasury bond?

The federal government can spend the proceeds from U.S. Treasury bonds on a multitude of uses, but it must pay the money back with interest, according to AARP.