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Social Security: TIA checks the facts

August 17, 2017

In response to our Social Security videos, I have compiled a list of references we used for the video and my interpretations of the material. 

  1. "Benefits are not directly related to or committed upon the receipt of earnings or the payment of taxes."

    1. Sheila’s interpretation: This means that even though Social Security taxes are taken out of your paycheck, the government doesn’t believe it owes you benefits.

    2. Source: Comments on “Accounting for Social Insurance, Revised Statement of Federal Financial Accounting Standards Preliminary Views,” Presented by Steve Goss, Chief Actuary, Social Security Administration, May 23, 2007, p.61 http://www.fasab.gov/pdffiles/si_publichearing_responses.pdf

  2. “An overriding uncertainty exists under the Social Security (and all Federal Social Insurance) programs. This is the Government’s right and ability to alter potential future benefits. Until benefits become due and payable, there is no binding commitment over which a worker has control and so no liability can be recognized.”

    1. Sheila’s interpretation: This means that the government believes it doesn’t owe  anyone any benefits beyond the checks that are due to be written this month.

    2. Source: Comments on “Accounting for Social Insurance, Revised Statement of Federal Financial Accounting Standards Preliminary Views,” Presented by Steve Goss, Chief Actuary, Social Security Administration, May 23, 2007, p.61 http://www.fasab.gov/pdffiles/si_publichearing_responses.pdf

  3. “In the public debate, ‘solvency’ means keeping the trust funds from exhausting their balances and ensuring the ability of the funds to finance promised benefits. Defined that way, however, trust fund solvency is not a meaningful measure of the government’s ability to meet its future obligations.

    1. Sheila’s interpretation: While many people say the trust funds will be “solvent” for years to come, this doesn’t mean the government will be able to pay benefits until some point in time.

    2. Source: Office of Management and Budget, pg 75 http://www.cbo.gov/doc.cfm?index=1908&type=0&sequence=4#N_1_

  4. Federal trust fund balances are not assets of the government. Under current law, trust funds are just accounting mechanisms established to link receipts that the government collects or assigns to specific uses with the spending of those receipts.”

    1. Sheila’s interpretation: The government has no cash set aside to pay benefits. That money was already spent by the government.

    2. Source: Office of Management and Budget, p. 75 http://www.cbo.gov/doc.cfm?index=1908&type=0&sequence=4#N_1_

  5. “In the federal budget, the term ‘trust fund’ means only that the law requires a particular fund be accounted for separately, used only for a specified purpose, and designated as a trust fund. A change in law may change the future receipts and the terms under which the fund’s resources are spent. In the private sector, trust fund refers to funds of one party held and managed by a second party (the trustee) in a fiduciary capacity.”

    1. Sheila’s interpretation: The Social Security trust fund is only called a trust fund because that is what Congress decided to call it. It is an accounting mechanism that just indicates how much the government has ever collected in Social Security taxes compared to the amount of related benefits paid.

    2. Source: Financial Report of the United States Government - 2016, p. 130 https://www.fiscal.treasury.gov/fsreports/rpt/finrep/fr/16frusg/NotestoFinancialStatements_2016.pdf

  6. “The Social Security Trust Fund is neither funded nor can it be trusted”

    1. Source: The Honorable David M. Walker, former Comptroller General of the United States

 
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