Will Social Security Actually Be Cut?

…So here is what I expect to happen. The elaborate and confusing charade of deficit politics will continue through this year and next—both parties solemnly seeking to shrink the swollen federal deficits—and distracting Washington from the real economic threat of stagnation or worse. At the end of the day, Social Security will not be cut. Nor will much else be accomplished, for good or for ill. Yes, the two parties may eventually approve some grandiose budget resolutions—official promises to cut spending drastically. But that process is usually a charade in itself with a long-established history of fiction and fantasy.

These budget promises do not become real until Congress authorizes projects and appropriates the money. The appropriators have the real power and they can change the numbers and designs and whatever else they wish. Depending on how senators and representatives feel at the time, they can embrace the promises and cut specific spending or totally ignore whatever the budget resolution had promised the public.

This is why I expect Social Security to survive the onslaught. When it gets to the money roll calls this year and next, individual members of Congress will have to swallow some big lies in order to vote for cutting Social Security benefits. First, of course, the cost-of-living gimmicks Obama has proposed will not shave a penny off the federal deficits or debt. That is because the Social Security benefits are not paid by the federal budget. They are drawn from the Social Security Trust Fund—the money paid in by working people every payday. People know this is their money, not some government handout.

So who gets tell the folks that their FiCA deductions were a joke—only an accounting fiction? The financial problems facing Social Security are easily fixed (as Obama himself has said) and are actually 30 years away. When the Congressional Budget Office is required to “score” Obama’s so-called cost-of-living reform, it will be compelled to announce that whacking the old folks contributes not a penny to reducing the federal government’s deficits.

In fact, there is an even bigger lie concealed by the fiscal scolds and ignored by witless media, too. Again and again, self-righteous critics have portrayed Social Security as the profligate monster borrowing from the Treasury and sucking the life out of federal government.

Guess what? It’s the other way around. The federal government borrows from Social Security. The Treasury has been borrowing from the Social Security Trust Fund for 30 years, and the debt to Social Security beneficiaries now totals nearly $3 trillion. The day is approaching when that money will be needed for its original purpose: paying Social Security benefits to the working people who contributed to the fund.

That is the real crisis that makes the financial barons and their media collaborators so anxious to cut Social Security benefits. They would like to get out of repaying the debt—that is, giving the money back to the people who earned it. The only way to do this is cut the benefits—over and over again. Count on it. If the president and Congress succeed in this malicious scheme, they will come back again and again to cut more and more. If the politicians join this sordid conspiracy, voters should come after them with pitchforks and torches.


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