Obama Admits There’s No Social Security Trust Fund

Obama Admits There’s No Social Security Trust Fund

Haven’t liberals been saying that there’s a Social Security “trust fund” that’s good until 2037? Sure, they have! Why, back in Feb of this year, Jacob Lew, the director of the White House’s Office of Management and Budget, was telling us that Social Security is completely secure!

Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries.

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When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds – backed with the full faith and credit of the U.S. government – and are held in reserve for when revenue collected is not enough to pay the benefits due. We have just as much obligation to pay back those bonds with interest as we do to any other bondholders. The trust fund is the backbone of an important compact: that a lifetime of work will ensure dignity in retirement.

According to the most recent report of the independent Social Security Trustees, the trust fund is currently in surplus and growing. Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.

Funny thing about that; Barack Obama is claiming (falsely, but still) that if the debt ceiling isn’t raised, we may not have the money to send out Social Security checks NEXT MONTH.

Here’s how President Barack Obama answered CBS’s Scott Pelley’s question about whether he could guarantee that Social Security checks would go out on August 3, the day after the government is supposed to reach its debt limit: “I cannot guarantee that those checks [he included veterans and the disabled, in addition to Social Security] go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”

And Treasury Secretary Timothy Geithner echoed the president on CBS’s Face the Nation Sunday implying that if a budget deal isn’t reached by August 2, seniors might not get their Social Security checks.

So, in other words, just as conservatives have been telling you, the Social Security “trust fund” is nothing but an big IOU that’s paid for with incoming tax revenues and borrowed money. In other words, most people don’t have any idea how iffy those Social Security benefits they’re relying on could turn out to be in the very near future.

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