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TSCL Calls On Congress to Enact Lock Box Legislation
There actually is a Social Security Trust Fund — of sorts. It lays nestled in the bottom drawer of an unremarkable filing cabinet in a government office building in West Virginia. It’s kept in a pair of loose-leaf notebooks holding plastic page covers, and each page resents a bond worth billions, according to a 2005 story from The Associated Press. Today, the total “assets” in the Social Security Trust Fund are worth more than $2.2 trillion.

The paper is “symbolic,” a spokesman for the U.S. Bureau of Public Debt says. According to The Associated Press, in 1994 Congress anticipated the current debate about Social Security’s solvency and whether the Trust Funds held anything more than I.O.U.s. Congress passed legislation requiring the Treasury to create a physical document “rather than an accounting entry.” Andy Jacobs, the former Indiana Congressman responsible for the law, said he wanted to rebut the “disingenuous assertions” that there was no trust fund, even though there was, in fact, no vault stuffed with cash to pay benefits.

Earlier this year the Congressional Budget Office (CBO) estimated that the Social Security Trust Fund ended 2007 with a rip roarin’ surplus of $187 billion, and this year the Trust Fund is projected to end with $197 billion. But almost all of that is “interest” earned on the IOUs. Just how much?
If the interest earned by the Social Security Trust Fund is excluded, and only real cash revenues counted, 2007 ended with a surplus of only $80 billion instead of $187 billion, and the Trust Fund is projected to end 2008 with a surplus of $79 billion instead of $197 billion, according to the 2008 Social Security Trustees Report. The Social Security Trustees further estimate that the program costs will begin to exceed cash revenues in 2017, or about nine years from now.

The Senior Citizens League (TSCL) believes that the first step to “saving” Social Security and Medicare is to stop the government from borrowing excess program revenues and to protect the extra funds for paying benefits. “If Congress is going to ‘save’ Medicare and Social Security, then lawmakers must stop using Medicare and Social Security Trust Fund monies as a piggybank for other government spending, ” states Daniel O’Connell, Chairman of TSCL. TSCL supports “The Social Security and Medicare Lock-Box Act” (H.R. 4338), introduced in the House by Representative Timothy Walberg (MI), and (S. 302), introduced in the Senate by Senator David Vitter (LA). The bill would establish a procedure to safeguard the surpluses of the Social Security and Medicare hospital insurance trust funds, and already has bi-partisan support.

Sources: “Social Security Trust Fund Sits In Drawer,” The Associated Press, February 28, 2005. “The Budget And Economic Outlook,” CBO, January 2008. 2008 Social Security and Medicare Trustees Reports, March 25, 2008.



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