Social Security, Like Peter Peterson, Is Draining Resources From the Federal Budget

The Washington Post (a.k.a. Fox on 15th Street) told readers that: "Social Security is already draining resources from the broader federal budget, as spending on benefits has risen above this year's Social Security tax collections."

Yes, Social Security benefit payments exceed the money currently being collected in Social Security taxes. The gap is being made up by the interest it earns on the $2.5 trillion in government bonds held in the Social Security trust fund. It is peculiar to describe spending money from its interest earning (or for that matter the bonds themselves) as "draining resources from the broader federal budget." However, if that is the standard the Post wants to use, then we should say that any individual or entity that draws interest from the federal government on bonds it holds is also "draining resources from the federal budget."

This means that billionaire Wall Street investment banker and long-time foe of Social Security Peter Peterson is also draining resources from the federal budget by the Washington Post standard (assuming that he owns some government bonds. No doubt the WAPO will have a story on this fact sometime in the near future.

--Dean Baker

Comments

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