Cutting Social Security's benefits does not reduce by a penny the federal deficit or the total value of debt instruments issued by the Treasury Department. The only way to reduce the amount of federal debt the Treasury issues is to reduce the expenditures of the government's general operating fund or increase its income.
Sen. Jeanne Shaheen is right: Social Security "has not contributed to the debt and the deficits." (Dec. 9: "Shaheen off on Social Security")
If a program paid for from general fund revenue were cut by $100 billion and nothing else changed, the federal government's borrowing needs would go down by $100 billion. As a consequence, the federal debt would also go down (or more realistically, given the current large deficits, would go Omega Speedmaster Moon Dial up less than it would have without the cut).
For those used to thinking about Social Security as just another spending program and about Social Security contributions as just another tax, the fact that Social Security does not and cannot contribute to the federal debt and deficit may seem counterintuitive, but it is true.
According to the most recent report by Social Security's board of trustees, Social Security had a $69 billion surplus last year alone. Far from increasing the deficit, Social Security loans funds to the federal government that reduce the deficit.
The Telegraph is wrong in stating that "the interest payments earned by Social Security only amount to a reshuffling of government dollars." If the federal government borrows money to pay off its obligations to Social Security, it would owe more to the public but less to Social Security.
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Workers. Nancy Altman is co director of Social Security Works.
The Social Security contributions deducted from the paychecks of America's workers, and matched by their employers, are funds dedicated to the exclusive purpose of paying for Social Security; they are held in trust for the beneficial use of working families.
The relationship between Social Security and the debt of the United States is a source of misunderstanding and confusion, but it is not a matter of conjecture or opinion.
In stark contrast, if Social Security benefits were cut by $100 billion, the federal debt subject to the limit or total debt would remain unchanged. If the $100 billion savings from cutting Social Security benefits were offset dollar for dollar by a cut in income taxes or an increase in general revenue spending, the total federal debt would increase.
Just as the law requires that employers keep assets from their pension trusts carefully accounted for, separate from their general operating funds, so the law requires that the assets of the people's pension Social Security be held in trust separate from the general fund of the United States.
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In a matter of months, the federal government will reach the debt ceiling, or the limit on the amount of money it can borrow. Cutting Social Security's expenditures or increasing its income does not reduce the amount of debt subject to that limit. This sharply differs from cuts to expenditures from the government's general fund, such as agricultural subsidies or defense.
Stephen Gorin is executive director of the New Hampshire chapter of the National Association of Social Omega Women's Watch Price
If the savings from that hypothetical cut were offset dollar for dollar by a cut in income taxes or an increase in other expenditures funded from general revenues, the federal debt subject to limit would be unchanged.
urge her to oppose any deficit reduction bill that includes cuts to Social Security.
This does not add to the deficit, nor change the debt obligation of the United States. Rather, as economist Dean Baker has pointed out, it "simply changes the identify of the owner of the debt."
By law, when Social Security has a surplus, it invests that surplus in the safest investment on Earth interest bearing Treasury obligations backed by the full faith and credit of the United States. Including last year's surplus, Social Security currently has an accumulated reserve of $2.7 trillion.
In short, Shaheen is right. We thank her for her comments and Omega Speedmaster Professional Watch
By law, Social Security cannot spend more than it takes in. It can only pay benefits if it has sufficient income to cover the cost.
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