It bugs me that there is an “attitude” expressed by the richer-than-poor who criticize Social Security for doing what it is suppose to do and what we want it do. As Hubert Humphrey said:
“It was once said that the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped.”
Social Security Insurance payments are supposed to be paid to people who reach a certain age or are disabled. The retirement/insurance system was set up to be funded by the employment wages of both employee and employer. It is a fairly modest benefit program, as anyone getting benefits can attest. So why complain that the program is going out of business because the payments are too high. This was evident in a recent WSJ, article titled “Has Social Security Disability Enrollment Hit Plateau?” 4/16/2014 .
The WSJ noticed that the number of Americans receiving Social Security disability benefits appears to have hit a plateau. Instead of applauding, the “paper” states that “The program has become so large that budget watchers have estimated it could exhaust all of its trust fund reserves sometime in 2016 or 2017. But as people have watched it grow, some experts have wondered if it would ever stop growing. Now they know – it leveled off, at least for now” and they wonder if program has actually peaked and will ever recede.
But the “bloated system” scare is not that. As WSJ points out: “In 2013, 2.6 million people applied for benefits, the lowest number since 2008, and the agency awarded benefits to 884,894 workers, the lowest number since 2007.”
What about the trust funds? Social Security’s financial operations are handled through two federal trust funds (1) the old-age and survivors insurance (OASI) trust fund and (2) the disability insurance (DI) trust fund. Although legally distinct, they are often referred to collectively as “the Social Security trust fund.” All of Social Security’s payroll taxes and other earmarked income are deposited in the trust funds, and all of Social Security’s benefits and administrative expenses are paid from the trust funds. In years when Social Security collects more in payroll taxes and other income than it pays in benefits and other expenses — as it has each year since 1984 — the Treasury invests the surplus in interest-bearing Treasury bonds and other Treasury securities. Social Security can redeem these bonds whenever needed to pay benefits. The balances in the trust funds thus provide legal authority to pay Social Security benefits when the Social Security program’s current income is insufficient by itself.”trust fund reserve”
A year ago –before the favorable 2013 year-end statistics – in May, the SSA board of trustees estimated “The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033, unchanged from last year, with 77 percent of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year’s estimate, with 80 percent of benefits still payable.”
Now imagine what how much more solvent the government trust funds could be if instead of investing in bonds they could have invested in government post offices which are going to be sold for “hundreds of millions of dollars.” No trust fund is broke because it lacks money. The government just decides – by the accounting rules it makes. Do we spend money on fighting wars, mailing letters or helping the disabled? Does the money we earn from the sales of government bonds go in the trust funds while the “fire sale” income from the real estate sales of GSA and USPS properties go elsewhere?