As Senator Jeanne Shaheen puts it, the benefits of the social security program should remain untouched when the other funds get cuts off. It is because the social security benefits are self-sustaining and don’t add to the national debt. Not just the senator, but many other experts and even any experienced Pittsburgh bankruptcy lawyer would say the same. PolitiFact magazine in 2011 also stated that social security has no role to play in the current debt crisis. As this is funded by payroll taxes, it is self-sustaining in its nature.
From 1984 to 2009, this program collected a large number of assets with a current account balance of $2.7 trillion. Both the trust funds for old people and disabled people can have interest payment that gets collected for a period of time. This amount actually contributes to reducing rather than increasing the deficit. These statistics have been provided from 2009 to 2011 by SSA.The Other Side of the Story
There are many other experts who are of the opinion that surplus and social security interest payments are just the ways of shuffling the accounts of the government. The social security accounts are not actually closed savings account. Rather, as a beneficiary, all the interest that you get from the social security account should be invested in interest-bearing bonds from the Government. After that, this money gets invested in different projects of government as well as other activities that include spending and debt repayment, and so on.
According to Howard Gleckman, an analyst from the Tax Policy Center, this way the social security collects interest payments and shifts the money from one government account to another. If one considers the interest payment, then they will find that the social security payment is basically running a deficit itself. This actually forces the government to borrow further so that they can cover the differences in funds. The calculations regarding social security benefits are nothing but accounting fiction. This eventually makes social security benefits more solvent. However, when you are availing of the benefits, you are just shuffling from one government account to another as per the opinions of many financial experts.
According to the annual report of SSA, the deficit of cash excluding interest payments in 2012 was around 49 billion dollars. This is expected to be increased to 60 billion dollars and by 2033, SSA will be left with not enough funds to cater to the general people as well as the listen beneficiaries. This same annual report also says that with time, the amount dedicated for the covered workers will be higher than the trustees. For this very reason, there are many financial experts who shoot down the argument that social security is not a cause of national debt. According to Kotniff from Boston University, a better-developed system can reduce the gap and help to improve the program.
Even though social security looks like a closed self-sufficient program, it is like any other program that is linked to treasury bond. The invested money only can be used in interest bearing government program. Hence, it can be safely said that it aids to national debts.