Social Security flap: much ado?
Much is at stake as Washington begins its budget endgame, but the
The outcome of this year's Washington budget wrangling has important implications for everything from foreign-aid funding to farm relief. But one thing that likely won't be affected, despite all the rhetoric from both ends of Pennsylvania Avenue: the nation's giant Social Security retirement program.
Dipping into the Social Security surplus to help pay for other programs would have no effect on benefit checks or the program's overall fiscal health. It would simply change, slightly, the way Social Security is financed.
That doesn't mean that keeping Washington's hands off the Social Security surplus - the self-proclaimed top budget goal of GOP Republicans - would be irrelevant. It could be an important symbolic commitment to tight-fistedness.
It just means that all the warnings about "raids" on the program's trust fund are a little overblown.
"They've picked a good goal. They're just misrepresenting why it's a good goal," says Robert Bixby, policy director of the Concord Coalition, a Washington-based fiscal watchdog group.
That Social Security is at the center of another round of Washington budget finger-pointing should come as no surprise. Both parties have a history of invoking - some would say demagoguing - the Social Security issue for their own purposes.
In 1986, Senate Republicans discussed benefit reductions as a long-term way of ensuring the program's future. Democrats pounced on the proposal like a beagle on a bone. Some in the GOP still think that is why they lost control of the chamber in that year's elections.
Now the GOP is attempting to position itself as the defender of Social Security. Republican appropriators have been trying every fiscal trick in their book, plus some previously unseen, as they attempt to pass the 13 fiscal year 2000 appropriations bills without touching the part of the surplus generated by Social Security, which is currently taking in more in taxes than it pays out in benefits.
Republicans agreed to discuss budget issues with President Clinton at a meeting on Oct. 19. At time of writing, results of the meeting were not known, but House Speaker Dennis Hastert of Illinois vowed that the GOP would not be part of anything that would "try to find secret ways to spend the Social Security surplus."
Of course, some say the GOP is already doing just that. Including such things as "emergency" appropriations, which technically are not a part of overall budget figures, this year's spending bills are already $15 billion deep into Social Security, according to the Congressional Budget Office.
Not that it matters - at least, not in the short run, and not directly. "It doesn't affect Social Security at all," says James Horney, an analyst at the Center on Budget and Policy Priorities. "It does affect how much government debt you pay down."
If the Treasury takes excess cash generated by Social Security for use in general government spending, it provides Social Security with Treasury bonds in return. It's something Uncle Sam has done for decades - since there had been a deficit in the non-Social Security budget.
Such bonds are assets. Right now, the Social Security trust funds have about $850 billion in assets.
If the Treasury does not tap Social Security for other purposes, it uses the surplus retirement program money to pay down the national debt. In return, Social Security gets ... that's right, bonds. The same thing.
"The Social Security trust funds receive the same amount of Treasury bonds - and thus have the same amount of assets - regardless of whether the Treasury uses the surplus funds to help fund other government programs or to pay down debt," concludes a Center on Budget and Policy Priorities analysis.
That doesn't mean defending Social Security is not a good thing, says the analysis. In the long run, the more national debt that Washington is able to defray, the better off the retirement system will be.
That's because the government will be on stronger ground when baby boomers retire and Social Security starts running a deficit, which should happen around 2015. Implying that there are near-term costs to "raiding" Social Security distracts from consideration of such longer-term problems, say some experts. It continues the tradition of using the program as a political tool. "The debate we ought to be having is how to use the surplus to reform Social Security," says Mr. Bixby.
The amount of money at issue in the current debate, some $10 billion to $15 billion, is not a large portion of the program's surplus, note others. They say the struggle to avoid spending it may not be worth the effort.
(c) Copyright 1999. The Christian Science Publishing Society