Is Social Security Fully Funded?

in Social-security, a group allied with the "Strengthen Social Security" coalition, calls for the halt of future reforms to the Social Security program. It states that these proposed reforms are unnecessary as it deems the program to be fully-funded in Treasury bonds, although it also released a statement quoting that after 2037, the retirement system will only be able to pay out an estimated 75% in benefits as opposed to full payment of expected benefits. The faulty logic rests with the fact that the organization believes that since the system is funded with Treasury bonds, it will earn enough money to make up for the shortfall. But this isn't exactly the case.

The arguments of the group and other like-minded factions are further weakened by explanations from the Clinton administration in 2000. The administration places the assumption of adequate funds in its place by saying that the funds aren't backed by actual assets, but rather Treasury claims that will get financing from higher taxes or the reduction of benefits when redeemed. Any excess Social Security funds were already spent on other expenditures, and no extra money is left to buffer against future budget cuts, the administration elaborated.

The repayment system as stated by the Clinton administration bolsters the fallacy of's contentions that the funds in Social Security are wholly separate from the federal budget, necessitating that it cover its own expenses and work towards eliminating deficits without any aid from the government. While it may be safe to say that the retirement program has funds for itself for the meantime, the funding depends on the bond repayments made by the government to the Social Security trust fund; deposits that will amount to billion-dollar loans or extra taxes per year. Bond repayments through loans will cause a growing deficit that's expected to reach over $40 billion this year and permanent yearly deficits after 2014.
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Is Social Security Fully Funded?

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This article was published on 2010/09/30