Congress’ Budget Delay to Cost Social Security Fund $38 Million

Congress’ balanced budget dispute and the resulting delay in raising the debt ceiling will cost the Social Security trust fund $38 million in interest in the next 10 days, a Treasury spokeswoman said today.

The Treasury dipped into the trust fund Friday for $15 billion so it could meet government obligations. That action was needed because Congress had failed to increase the government’s borrowing authority to $2 trillion due to a dispute over a balanced budget rider attached to the debt bill.

Treasury says the money it got from Social Security is enough to last through Nov. 14.

“We will lose roughly $38 million between Nov. 1 and Nov. 14 (in the Social Security trust fund),” Treasury spokeswoman Kim Hoggard said. “And we will need special legislation to put it back.”

Both the House and Senate versions of the balanced budget amendment appear likely to contain the legislation to make the trust funds whole again.

The Senate, which initially approved a balanced budget measure last month, scheduled debate this week on changes. Included among the modifications is a plan designed to require some budget cuts this year, rather than waiting until next year, because critics charged that the original “Gramm-Rudman” bill was designed to ease reelection bids for incumbent Republicans next fall.

The House-passed balanced budget plan allows a deficit of no more than $161 billion in the fiscal year that just started, a number certain to require budget cuts quickly. The House also protected many social programs from cuts, as well as agreeing with the Senate to exempt Social Security.