Raiding Social Security Trust Fund Debate and Poll
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FACT 1 10-31-99
As Congress struggles to finish work on the federal budget for the fiscal year that began Oct. 1, a fierce political battle is raging once again over Social Security. Eager to maintain control of the House, congressional Republicans are running television ads accusing Democrats of "raiding" the Social Security trust fund to finance extra spending. Democrats say the charge is a lie and contend GOP leaders are doing exactly what they accuse the Democrats of doing.
The federal government has been borrowing from social security since 1983. Interest-bearing IOUs are building up in the trust fund that are backed by the full faith and credit of the government. In fact, both parties have spent more than $600 billion in Social Security surpluses on other government programs.
Republicans have promised to finance the 13 annual spending bills without dipping into surplus revenues generated by Social Security. By so doing, they say, they will be "protecting" Social Security from the Democrats. Clinton has also promised to keep his hands off Social Security.
Of the overall $161 billion surplus forecast for the current fiscal year, $147 billion comes from Social Security. So to do what they promise, Congress must use only $14 billion of the surplus to finance new programs. That means that all 13 spending bills, covering everything but the giant entitlement programs like Medicare and Medicaid, must not exceed $594 billion.
Both Clinton and the Republicans want to spend more than $594 billion this fiscal year; in fact, the 12 spending bills already approved--plus the one remaining measure for labor and health programs--would use roughly $614 billion, according to the Congressional Budget Office, the nonpartisan budget analysis arm of Congress.
The Republicans are violating their pledge. The way they add up the numbers understates the amount of actual spending through the use of several creative accounting tactics. They rely on accounting techniques like delaying billions of dollars in spending until fiscal 2001. Republicans also ordered the Congressional Budget Office - Congress' official scorekeeper - to count $18 billion in savings that the budget office did not believe were there. Even with this, the Republicans still were over their limits by $5.6 billion. Unable to agree among themselves on additional specific spending cuts, the Republicans settled on a 1 percent cut in virtually every government agency and program.
According to the CBO, the Republican spending bills are $17.1 billion into Social Security money. That's principally because the CBO disagrees with the Republicans' use of directed scoring. Traditionally, Republican leaders have insisted on using CBO forecasts in writing their budgets and literally vowed to shut down the government in 1995 unless President Clinton accepted the CBO estimates. But trapped in a budget box of their own making this year, Republicans concluded they had no alternative but to pick and choose among CBO and administration spending forecasts to produce the most advantageous mix.
Clinton has proposed some of the same
accounting tactics as the GOP, though not to the same extent. He has also
proposed raising tobacco taxes and user fees to make up the difference--an
approach rejected by Congress.
House Speaker J. Dennis Hastert (R-Ill.) has circulated a letter from CBO Director Dan L. Crippen acknowledging that, if the directed scoring tactic were allowed, the Republican plan indeed would not dip into Social Security. But Crippen and other CBO officials dispute the use of that tactic.
Republicans are gambling that CBO will be proved wrong. They are betting that, as it has for the last three years, the booming economy will ride to the rescue by bringing the government tons of revenue that budget analysts do not expect. The more money that pours in, the bigger the actual federal surplus for fiscal 2000 will be and the smaller the chance that federal spending will eat into the Social Security portion of that surplus. But the day of reckoning will come when final official figures for the fiscal 2000 surplus are released in late October 2000 - just days before the November elections for control of Congress and the White House. Fiscal 2000 ends next Sept. 30. If those numbers show the Social Security surplus was protected, Republicans will celebrate and cast themselves as defenders of the program. But if the numbers do not cooperate, it is certain that Democrats will use the news against the GOP as part of their effort to capture congressional control. House Majority Leader Dick Armey, R-Texas, said Friday he believes Republicans have nothing to worry about. Democrats disagree. They have been citing CBO's numbers to argue that Republicans are already breaking their own Social Security promise