In a “Dear Republican Party” Facebook post, the group Occupy Democrats suggested that the GOP would use federal deficits and debt as a false pretense for cutting Social Security.
“Social Security has nothing to do with the deficit or the national debt,” the post said. “You created that fiction and we’re not falling for it.”
We previously rated the same claim as Mostly False. And an expert says that is still the case.
“Social Security and the rest of government are far more intertwined than this post suggests,” said Howard Gleckman, a senior fellow at the Tax Policy Center, which is part of the Brookings Institution, a Washington think tank.
To support its claim, Occupy Democrats — which describes itself as a political organization and advocacy journalism group — cited to PolitiFact a quote from the Social Security Administration’s chief actuary, Stephen Goss. It was in a 2010 article from the liberal Economy Policy Institute.
The article says that when Social Security draws down its assets to pay benefits to baby boomer retirees, it contributes to what is known as the unified budget deficit (more on that shortly), and the authors say “over time, Social Security cannot add to the federal deficit.”
Goss’ comments included in the article, which were taken from a 2010 presentation he gave, were, “Trust funds enforce long-term budget neutrality. Total spending to date cannot exceed income to date.”
Gleckman said things have changed since the article was published in 2010, when Social Security moved from running surpluses to deficits.
“Social Security currently is generating less revenue each year than it pays out in old age benefits,” he said.
Though previously debunked, this claim persists. In another claim about Social Security and deficits that we rated Mostly False, we reported at length about how Social Security adds to the deficit.
Experts told us then that there are two main measures of the federal deficit: the “on-budget” balance, which essentially includes everything except Social Security; and the “unified budget,” which merges the on- and off-budgets, and is the more common for budget experts and the media.
Social Security adds to the unified deficit.
It’s a pay-as-you-go system: Payroll taxes paid by current workers and their employers go to pay benefits to current retirees and other Social Security recipients.
From 1984 to 2009, Social Security collected more money in payroll taxes than it paid out in benefits, generating a surplus. That surplus was transferred from the Social Security program to the federal government’s general fund. In return, the Treasury issued bonds Social Security could keep in its reserves and redeem to pay future benefits.
The government, in turn, incurred obligations to repay the bonds, plus interest, to the Social Security trust fund.
Since 2010, Social Security began running deficits of its own, and began redeeming the bonds, plus interest, from the federal government.
In other words, money was transferred from the government’s general fund to Social Security. The Treasury has to borrow money to make the transfer.
When Social Security is running deficits, “this increases the unified budget deficit dollar for dollar,” Andrew Biggs, a Social Security expert at the conservative American Enterprise Institute think tank, told PolitiFact regarding the Occupy Democrats claim.
In 2022, $56 billion was tapped from Social Security’s reserves, Gleckman said.
Occupy Democrats said, “Social Security has nothing to do with the deficit or the national debt.”
Social Security began running deficits in 2010, which means it relies on its reserve funds that are held by the Treasury Department in the form of government bonds. Treasury must borrow money to repay the bonds, which adds to the federal deficit.
The statement contains an element of truth, because when Social Security runs a surplus, it does not contribute to the federal deficit. But by overlooking the past 12 years, when Social Security has run deficits, the statement ignores critical facts that would give a different impression.
We rate it Mostly False.
This fact check was originally published by PolitiFact, which is part of the Poynter Institute. It is republished here with permission. See the sources for this fact check here and more of their fact checks here.