Jacob Lew: "There is No Need to Deal With Social Security"
While speaking at a Christian Science Monitor breakfast in February 2011 President Obama's new Chief of Staff Jacob Lew claimed that "there is no need to deal with social security". He even went so far as to say that "dealing with it would have, at best, negligible impact" on the deficit.
According to Lew Social Security is "solidly funded through 2037" but that, of course, isn't true. In fact, Social Security is already paying out more than it's bringing in from payroll taxes. $45 billion more this year alone. And, as the Social Security trustee's reported in May of 2011, deficits are “a permanent feature of the program’s finances going forward".
What about the Social Security trust fund, you ask? Well that's what Lew seems to be relying on when he says the program is "solidly funded" through 2037. That is the date the trust fund completely runs out. Or it was until 3 months after Lew made these remarks when it was revised down a whole year to 2036 (a trend that's sure to continue). But don't even let that trick fool you.
Social Security has been adding to the deficit ever since it went into the red last year. It does it in a more round about way than it will when the trust fund runs out but that's just a matter of semantics. As the trust fund is currently set up, which is all explained on their website, the money that is brought in from Social Security taxes is immediately used to buy "special issue" securities from the Treasury. Those are basically sweet heart bond deals since they can never be redeemed for less than face value no matter when they're redeemed and nobody but the Social Security trust fund can buy them. Then the taxes used to buy the sweet heart securities are sent into the general fund and immediately spent on whatever other crap congress feels like spending it on at any given moment.
When it comes time for the fund to pay retirees it cashes in the sweet heart securities and is paid back with treasury cash. Can anybody guess where that treasury cash comes from? Yup, the general tax fund.
Therefor, since the government is borrowing tax money from itself in order to pay itself back with other tax money, you still end up adding to the deficit anytime Social Security taxes don't equal the Social Security pay outs. So, yea, Jacob Lew is wrong and incredibly far left on this issue.
There you have your Presidential Chief of Staff everybody. I wonder if the President who just appointed him agrees that there is "no need to deal with Social Security"? I won't hold my breath for anybody in the liberal media to ask him...