Why is income to the Social Security trust funds counted as a part of the federal budget?
Social Security programs were removed from the budget during the 1980’s, but the budget policy makers continue to add them back into the “unified budget”. This practice has continued despite legislative efforts to stop it, because the federal deficit would be much larger if Social Security excesses of income over outgo were not added back in. During 1998 alone, such excess is expected to be about $100 billion. When this $100 billion is included in the unified budget, the federal government operating deficit appears to be $100 billion less than actually is. The budget “surplus” to which the Congress and President refer exists only because of the Social Security excess of income over outgo. By the end of 1998, the total assets of the Social Security trust funds will reach about $750 billion–an amount that has helped to hide the true size of the federal deficit.
Related Questions
- What effect would the investment of a portion of Social Security funds in the equity markets have on the federal budget, since presently all money is invested in treasury securities?
- Is it true that the federal balanced budget includes the operations of the Social Security trust funds, and would it balance without it?
- What would be the impact on the federal budget of diversifying the trust funds into stocks?
