Dipping Into Social Security Not Likely
In campaign appearances this week, Gov. Michael S. Dukakis has wheeled the Democrats’ heavy artillery--the Social Security issue--onto the political battlefield against Vice President George Bush, suggesting that the Republican nominee might try to cut into the retirement fund or benefits to defray the huge federal budget deficit if he is elected President.
The charge is a potent one for Dukakis because it challenges Bush’s claim to represent mainstream American values and interests. It hearkens a threat to a far-reaching federal program that has become an inalterable part of middle-American life for 40 years.
However, government and political analysts say the prospect that Bush--or any other President--could actually dip into Social Security money for any other purpose is virtually nonexistent.
Controlled by Law
By law, the money collected in payroll taxes can be used for just two things: sending out benefit checks and administering the Social Security program itself. Any surplus in the retirement fund must be invested in special government bonds, earning interest that will be used to pay retirees and disabled people in the future.
In order to appropriate that money for deficit reduction or any other purpose, a President would have to persuade Congress to change the law. No Congress has ever seriously considered such action, experts say.
In the past, cost-cutting analysts have suggested the possibility of reducing the annual cost-of-living increase the nation’s 38 million recipients receive. However, the idea has proved to be political dynamite.
When congressional budget negotiators began discussing this option last year to save money, leading senior citizens advocate Rep. Claude Pepper (D-Fla.) threatened to call for a recorded House vote on the issue. The suggestion died instantly.
Bush campaign officials have dismissed any possibility that a GOP administration would look at Social Security for potential savings. The charge “is just a lie,” Bush campaign manager Lee Atwater said Monday.
Bush Backed Freeze
However, Dukakis has noted that in 1985, Bush backed a Republican budget plan that included a freeze in Social Security cost-of-living increases, a provision that was later abandoned.
If Bush holds with his vow not to increase taxes, not to trim back on costly defense programs and still tries to reduce the budget deficit, “then how’s he going to do it without raiding the Social Security trust fund and trying to cut Social Security and Medicare again?” Dukakis asked an audience in Peoria Tuesday.
The fact that Social Security is one of the few federal programs that collects more money than it spends is not enough to make it a feasible option for relieving the budget crunch, government and congressional experts say.
The Social Security Administration will collect $262 billion in taxes this year from workers and their employers, and will spend $222 billion, a spokesman said Wednesday. The remaining $40 billion will go into the special bond issue--legally isolated from other government programs.
Even if Congress wanted to divert the funds to cut the budget deficit in the short run, the money could not be spared, program officials say. Although tax revenue from workers will continue to exceed payments to retirees until 2030, that will change radically as the baby boom hordes begin to reach retirement age.
At the current rate, the fund will be exhausted in less than 20 years, by 2048.