“The government has lied to you and they have stolen from you. They told you that your Social Security money is in a trust fund. All that’s in that trust fund is a pile of IOUs for money they spent on something else a long time ago.
And they’ve stolen from you because now they know they cannot pay these benefits and Social Security is going to be insolvent in seven to eight years.
It isn’t there anymore, Mike (Huckabee). It got stolen from them. It’s not theirs anymore. The government stole it, and spent it a long time ago…So, let’s stop fooling around about this, let’s tell people the truth. For once, let’s do that, and stop trying to give them some kind of fantasy that’s never going to come true.”–Governor Chris Christie at the CNBC’s GOP Debate, October 28, 2015
The latest GOP Debate was notable for many reasons, including the candidates’ unfettered dissatisfaction with Social Security. The quote above, from Governor Christie, was representative of what was discussed throughout the debate. According to the transcript, the term Social Security was mentioned 31 times. The candidates had the GOP Social Security talking points memorized and repeatedly accused the government of lying to us and stealing our money. Together they matter-of-factly agreed that Social Security will be insolvent soon. Notice that Christie gives it “seven or eight years.” Nobody disagreed with that statement.
The GOP is purposely disregarding the Social Security Works! movement and the fact that 62% of the Republican voters agree that we should consider increasing Social Security Benefits”(pg 9). They are also forgetting President Reagan’s efforts to keep Social Security strong.
In 1983, under President Reagan’s leadership, the government took major steps to strengthen Social Security. Its outlook wasn’t great. The Social Security’s Trust Fund Ratio, (the portion of the year’s cost which could be paid solely with the reserve at the beginning of the year) was 14%. The 2014’s ratio, for comparison, 322%.
President Reagan had the foresight to realize the impact the Baby Boomers had on the future of Social Security. He raised the Social Security Tax rate from the 1980 level of 5.08% in small increments to 5.7% in 1984. The plan was to have a surplus to support the retirement of the Boomers–and to have the Boomers pay for it in their working years.
Since the beginning of Social Security Trust Fund, it has been legally obligated to place surpluses into United States Treasury Bonds. Did the government spend the money it received from selling bonds to Social Security? Yes. Did the government steal our money? No. All bonds are sold by governmental entities, from Villages to the Federal Government, to raise funds to be spent on their projects. The GOP candidates seem to pretend that bonds are saving accounts. They are not.
The United States Treasury Bonds, like the dollars in our wallets and purses, are guaranteed by the government. If the Treasury Bonds are worthless, then our dollars are worthless. Did you every buy Series EE Saving Bonds? You redeemed them when you wanted the money. The Social Security Trust Fund can redeem their Treasury Bonds when it wants the money.
Matter of fact Social Security is presently using the interest from their Treasury Bonds; they provided 11.1% of Social Security’s 2014 total revenue of $884 billion. The Social Security actuaries have calculated that they will have surpluses (more revenue than expenditures) until 2020. At the point they will redeem their Bonds, and they will help keep Social Security solvent until 2034.
With those dates in mind, our leaders need to start working on changing the way Social Security gets its revenue to provide the benefits that our workers have been promised. Many plans are being discussed–some strengthens Social Security and some reduces benefits. Most believe that it is better to start true discussions sooner than later.
Every GOP candidate at the CNBC debate knows and understands the facts about the bonds. Still they purposely misled the viewers. The reporters asking the questions also know and understand those facts. Still they did not call out the candidates as they misrepresented them. The government didn’t lie to us nor did it steal our money. Social Security will not be insolvent in seven to eight years. Social Security has been worst off in the past, then with honest leadership rebound. it rebound. It can happen again, with honest leadership.