The Medicare portion was never cut, but the social security portion was reduced mainly because the social security fund is still bringing in more money from tax receipts than it is paying out in benefits at this time, says Abdur Chowdhury, a professor at Marquette University and economic advisor to the Chicago Federal Reserve.
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Congress spent these surpluses, and the U.S. Treasury issued the Social Security Trust Fund special bonds, which can be redeemed whenever the Social Security system has a current account deficit.
In effect, Congress would still have to borrow more money to make up the shortfall only it would borrow it for the general fund rather than the Social Security trust fund.
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But the government will borrow those new deposits, leave an IOU in the Trust Fund and then promptly spend the money just as it has with the Social Security Trust Fund perhaps on some worthless green energy project that may eventually embarrass the Obama administration.
Social Security payments are not entitlements: they are obligations to the people who paid the surpluses into the Social Security Trust Fund since 1983.
It will be in addition to the accumulation in the Social Security trust fund that would occur with no change in the current law.
The president does not have discretion under the Constitution to refuse to pay interest and principle on the national debt, including the Social Security trust fund bonds, as long as he has the money to do so, which he would even without an increase in the debt limit, or taxes, as explained above.
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The plan to invest some of the Social Security trust fund on Wall Street purports to address this: real assets would henceforth back the promise and, you might think, there is a double benefit because returns on Wall Street are higher than returns on the fund's existing portfolio of bonds.
At its inception the Social Security Trust Fund and other trust funds were held Sacrosanct, i.e.
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Honest Bookkeeping Washington should separate the Social Security Trust Fund from the federal budget.
Despite the existence of the Social Security Trust Fund, surplus money isn't really set aside for pensions.
Well, when we get back to fiscal responsibility, we'll start paying back the Social Security Trust Fund.
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That same amount will be credited to the Social Security Trust Fund, in the form of Treasury securities.
The Social Security trust fund bonds are explicitly backed by the full faith and credit of the United States.
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And besides, they insist, the Social Security Trust fund would be made whole through transfers from the general fund.
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The commission members who opposed privatisation wanted to underpin the solvency of the Social Security trust fund by raising contribution rates.
On the current trajectory, the Social Security disability fund is projected to run out of money during Mr. Obama's second term.
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Quite simply, because the diversion of funds to individual accounts would reduce the money available to the Social Security trust fund.
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They also projected that the Social Security Trust Fund would be exhausted in 2032, 34 years from the time of the report.
Payroll taxes were raised and a surplus generated that is placed in the Social Security Trust Fund, which invests in Treasury bonds.
The Social Security trust fund, together with payroll taxes, is sufficient to cover program benefits for more than the next 20 years.
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Federal revenues and the Social Security trust fund are far too important to depend on the fuzzy distinction between employee and independent contractor.
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On Saturday, the Wall Street Journal pointed out that the Social Security trust fund includes trillions in securities, representing past surpluses plus interest.
The President's proposal would reduce the debt borrowed from the public, and deposit assets of an equal amount in the Social Security trust fund.
But what if funds borrowed to pay back the Social Security Trust Fund came at least in part from the Federal Reserve through Quantitative Easing?
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The public also prefers Clinton's overall approach to the budget negotiations and trusts Clinton more than the GOP to handle the Social Security trust fund responsibly.
Number one is that the Social Security trust fund -- there wasn't a fence around it so people started borrowing out of it for other things.
Mr Clinton also added that the Social Security trust fund should be bolstered from general revenues by the amount of interest that this debt paydown had saved.
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But Messrs Feldstein and Samwick also assume that the Social Security trust fund will be allowed to go into debt for about 20 of the next 75 years.
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The Social Security trust fund will technically cover any shortfall for another 20 years or so, but then benefits would have to fall by about one-quarter to match outlays with revenues.
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