Congress does not spend the annual surplus in the trust fund. All FICA payroll deductions to Social security are transferred into the trust fund. The only payments made out of the trust fund are payments made to Social Security recipients (and I believe the administration costs). When an annual surplus occurs it appears as an accounting entry in the consolidated federal budget for that year. If the surplus were say $300B in a given year it has the effect of reducing or offsetting $300B in the federal deficit that year. While Congress may see that as a pile of available money in some sense, the funds never leave the trust fund. They are never “spent” for other purposes. They may mask additional deficit spending in the general revenue side of the budget, but they are not spent.
The SSA trust accounts should not be consolidated with the rest of the federal budget. It makes no sense that they are, but this is the federal government after all.
Three are a million things that are debatable about Social Security, this isn’t one of them.
Please tell me you are kidding...
Look at the SSA FAQ page...http://www.ssa.gov/OACT/ProgData/fundFAQ.html#n5
As stated in the answer to “What happens to the taxes that go into the trust funds?”, most of the money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.
Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 30 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds’ securities will need to be redeemed on a large scale prior to maturity.
Not directly, but it does get spent by going into the general fund.
24.1 Are the Social Security trust funds left untouched and saved exclusively for Social Security purposes?
Social Security contributions which are not needed to pay current benefits are invested in government securities which are required by law to have maturity dates with due regard to the needs of the trust funds. The government also pays interest to the trust funds, at a long term rate determined by law. The government uses the invested funds to finance other government spending. The government owes the money which the trust funds have loaned to it and the government will have to repay it as the securities come due.
So, once again I would ask, how is the government going to meet that obligation?