Social Security will have to draw from its reserve funds for the first time since 1982 to pay for benefits. The Government will also have to draw from the Medicare trust fund. According to the Social Security trustees, the Social Security trust fund will be depleted by 2034 and the Medicare trust fund will be depleted by 2026 and the share of Medicare benefits that can be paid by current revenues will decline by 78% by 2039.
One major cause of this is that Congress has raided the Social Security Trust fund to pay for other spending. The result is the so-called trust fund has nothing in it but IOUs from the Treasury. This means that Congress either must cut benefits, raise taxes, or some combination of both. Of course, Congress will have help from the Federal Reserve, and thanks to Chained CPI Congress will find it easier than ever to rely on the Fed to do their dirty work.
Whatever your views of the Social Security program, everyone should agree that when Congress tells the people it is taking their money for a specific purpose they should at least keep their promises. That is why Campaign for Liberty Chairman Ron Paul introduced the Social Security Preservation Act, which would have made sure social security taxes were spent on social security.
Here is Dr. Paul’s official statement on the bill:
INTRODUCTION OF THE SOCIAL SECURITY PRESERVATION ACT
HON. RON PAUL
in the house of representatives
Tuesday, January 6, 2009
Mr. PAUL. Madam Speaker, I rise to protect the integrity of the
Social Security trust fund by introducing the Social Security
Preservation Act. The Social Security Preservation Act is a rather
simple bill which states that all moneys raised by the Social Security
trust fund will be spent in payments to beneficiaries, with excess
receipts invested in interest-bearing certificates of deposit. This
will help keep Social Security trust fund moneys from being diverted to
other programs, as well as allow the fund to grow by providing for
investment in interest-bearing instruments.
The Social Security Preservation Act ensures that the government will
keep its promises to America’s seniors that taxes collected for Social
Security will be used for Social Security. When the government taxes
Americans to fund Social Security, it promises the American people that
the money will be there for them when they retire. Congress has a moral
obligation to keep that promise.
With federal deficits reaching historic levels, and with new demands
being made on the U.S. Treasury on an almost weekly basis, the pressure
from special interests for massive new raids on the trust fund is
greater than ever. Thus, it is vital that Congress act now to protect
the trust fund from big spending, pork-barrel politics. As a medical
doctor, I know the first step in treatment is to stop the bleeding, and
the Social Security Preservation Act stops the bleeding of the Social
Security trust fund. I therefore call upon all my colleagues,
regardless of which proposal for long-term Social Security reform they
support, to stand up for America’s seniors by cosponsoring the Social
Security Preservation Act.