Americans Must Insist on Truth in Budgeting
For the first time in a generation, Congress is debating what to do with a federal budget surplus instead of trying to cope with huge deficits. This historic achievement by Congress and the president deserves recognition.
But our celebration should be tempered by the fact that the only reason the federal government is able to balance the budget this year is because of surpluses in the Social Security Trust Fund.
Before we decide to spend a surplus that really isn’t there, Americans should insist on something I have advocated for years: truth in budgeting. Money that taxpayers have paid into Social Security for their retirement should not be used to pay for everything from foreign aid to defense to public housing. That is just plain dishonest.
The same is true of other federal trust funds. Congress has delayed needed highway projects that could be paid out of the federal Highway Trust Fund to offset deficit spending for unrelated programs.
Congress ought to stop that kind of budget chicanery and make sure all the trust funds are used only for their intended purposes.
Social Security is a sacred contract with the American people. For more than 60 years, Americans have paid into the Social Security system, rightfully expecting to receive their fair share when they reach retirement age. Unless Congress acts to preserve it, we risk jeopardizing that contract.
In each of the past 15 years, Social Security has generated more money than it paid out. But starting in 2006, that annual surplus will begin to flatten out as the number of recipients increases. By 2039, the Social Security trustees say, the system could be bankrupt.
Small steps now can prevent future draconian tax increases, possible benefit reductions or more government debt.
This year, the Congressional Budget Office is projecting an overall $8-billion federal budget surplus--the first year the federal government will be in the black since 1969. This historic achievement should not be squandered.
Controlling the growth of federal spending and reducing the need for federal borrowing has resulted in a sharp decrease in interest rates. Lower interest has stimulated strong economic growth without inflation by making almost everything more affordable. This has meant more jobs, more income and a better standard of living for all Americans.
What many people don’t know is that without the current surpluses in the Social Security Trust Fund, the overall federal budget would not show a surplus this year. This year Social Security is expected to raise $480 billion and pay out $382 billion, resulting in a $98 billion surplus.
Without counting Social Security, this year’s total federal budget would be projected to produce a $90-billion deficit--not an $8-billion surplus. That is why it makes sense to commit this year’s budget surplus and any future surpluses to the Social Security Trust Fund that generated them. Not only is it the morally right thing to do, shoring up the trust fund will enable Social Security to keep meeting its obligations.
In addition, Congress should commit to continuing to control the growth in federal spending so that we can reach our original target of balancing the budget by 2002, this time without continuing to raid the Social Security Trust Fund.
I have co-sponsored legislation that would end those trust fund raids. The Social Security Preservation Act would ensure that Social Security surpluses cannot be used to pay for other government programs. This bill would also ensure that any trust fund surpluses are invested safely to generate interest on behalf of current and future Social Security recipients.
President Clinton, to his credit, has proposed committing projected budget surpluses to Social Security in his budget for next year. But at the same time, the president is proposing $150 billion in new federal spending while planning to increase taxation to a record peacetime level.
The federal government simply should not be spending money needed to preserve the Social Security system on other federal programs. The better course would be for the president to join with Congress in working to balance the federal budget by controlling spending growth.
Truth in budgeting would go a long way toward restoring the trust of Americans in our Social Security system and preserving their retirement income.