Replies

I was wrong. Here is what happened and how they got their greedy hands on it.

he 1968 decision: In 1968, the Johnson administration reclassified the Social Security trust funds to be "on-budget" beginning with the 1969 fiscal year. This combined the Social Security trust funds with the rest of the federal budget for accounting purposes, which made the Social Security surplus appear to reduce the federal deficit.

How the "borrowing" works: When Social Security collects more in payroll taxes than it pays out in benefits, it must, by law, invest the surplus in special-issue U.S. Treasury bonds guaranteed by the government. This money is then transferred to the government's general fund and used for other purposes. The bonds held by the Social Security Trust Fund are a legal obligation for the Treasury to repay with interest.

A common misconception: It is a common myth that Congress "raided" or "stole" the Social Security funds. In reality, the process is a legal arrangement where the government borrows from Social Security, just as it borrows from public investors. While it is a form of borrowing that adds to the national debt, it is not illegal. 1983 and 1990 budget acts: Subsequent laws have affected the fund's budget status.

The Social Security Amendments of 1983, signed by President Ronald Reagan, gradually moved the funds back "off-budget". The Omnibus Budget and Enforcement Act of 1990 completed this process, exempting the Social Security and Medicare trust funds from any general budget calculations or sequestration, though the underlying borrowing mechanism did not change.