I apologize to BTP regulars for repeating myself, but since the confusion on the topic of the trust fund persists, I am afraid I must give another brief lecture on the Social Security trust fund. Under the law (which is what is binding here), the fact that Bush or anyone else may have spent the Social Security surplus makes no difference whatsoever. The trust fund holds the same number of bonds as if every cent of the surplus were saved. So, unless Congress votes to default on the government bonds held by the trust fund, then we should think about Social Security's future as though the all the money in the trust fund is there for it to be used, because under the law it is. Now, things could change and Congress could vote to default on the bonds held by the trust fund, but this seems unlikely given the popularity of the program. To date, not one of the 535 members of Congress has publicly advocated default on the bonds held by the trust fund, which is no doubt because such a default would lead to public outrage. The outrage would likely be even greater if the default were to be voted in 10-15 years when the share of retirees in the population will be even larger than it is today. So, unless the reporters know something that they are not reporting (in which case they should probably be fired), they should be discussing Social Security's finances as though current law is followed, which means the bonds in the trust fund are fully honored. In this scenario, the program can pay all scheduled benefits until 2046 according to the Congressional Budget Office.
--Dean Baker
