[PV] Keeping Promises to Seniors...Ron Paul's Weekly Column

[Frenchy]

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Keeping Promises to Seniors

With our country's finances stretched thin, our credit limit fast approaching, and our currency inflated to the breaking point, there is no indication yet of any urgency on the part of Congress to rein in spending. The predictable answer to the government's voracious spending habits is this week’s proposal by some Democratic Congressional leaders for tax increases to pay for operations in Iraq . Here at home, however, there are promises our seniors heavily rely upon. We must keep these promises.
An analysis of the Social Security "Trust Fund" shows we are not doing a credible job of keeping these promises. Official reports show the trust fund having assets of $2.1 trillion. In reality, those dollars are just IOUs the government is writing to itself when it borrows from the fund to spend on unrelated programs. There are no real assets in the Social Security Trust Fund. This is similar to taking money out of your savings account, spending it, then replacing it with an IOU to yourself, and calling that IOU an asset.
In addition, this money we owe to our seniors is not even included in official budget deficit figures. In fiscal year 2006 alone, $185 billion was borrowed from Social Security. The official deficit was reported to be $248 billion. The actual deficit for 2006 would be $433 billion when combining the two. This sort of accounting would land private sector executives in prison for fraud.
Yet this is done every year by the federal government. The truth is that while politicians in Washington differ about what programs to spend Social Security money on, they are united in wanting to spend it on something other than benefits for seniors.
This approach can continue only until Social Security stops running “surpluses” the government can raid. Trustees of Social Security estimate this will happen in 2017. At that time, the amount owed to the Trust Fund will be between $4 trillion and $5.2 trillion, depending on the economy.
When that day of reckoning comes, there will no longer be “excess” payroll tax receipts available to prop up government spending, and the risk of financial crisis will be significant. Instead of forward thinking solutions, politicians are discussing alarming proposals, such as an agreement with Mexico to let their citizens collect social security money intended for our seniors. This would break the bank even sooner. But, current Members of Congress will no longer be in office to face the wrath of seniors and their families when the trust fund goes bankrupt. Instead, they will be retired and enjoying their own plush Congressional pensions.
I have been working to reverse this trend. My Social Security Preservation Act, HR 219 would make sure this Trust Fund has real assets such as certificates of deposit in FDIC-insured institutions so that in 2017 and beyond, Social Security payments would continue for those who are depending on them.
Congress must take action now, so we can keep the promises we made to our seniors.
http://www.house.gov/paul/tst/tst2007/tst100707.htm

[eric_t12]

Full text of HR219

109th CONGRESS

1st Session

H. R. 219
To amend title II of the Social Security Act to ensure the integrity of the Social Security trust funds by requiring the Managing Trustee to invest the annual surplus of such trust funds in marketable interest-bearing obligations of the United States and certificates of deposit in depository institutions insured by the Federal Deposit Insurance Corporation, and to protect such trust funds from the public debt limit.


IN THE HOUSE OF REPRESENTATIVES


January 4, 2005

Mr. PAUL (for himself, Mr. MICA, Mr. DUNCAN, and Mr. GOODE) introduced the following bill; which was referred to the Committee on Ways and Means


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A BILL
To amend title II of the Social Security Act to ensure the integrity of the Social Security trust funds by requiring the Managing Trustee to invest the annual surplus of such trust funds in marketable interest-bearing obligations of the United States and certificates of deposit in depository institutions insured by the Federal Deposit Insurance Corporation, and to protect such trust funds from the public debt limit.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


SECTION 1. SHORT TITLE.

This Act may be cited as the `Social Security Preservation Act of 2005'.


SEC. 2. INVESTMENT OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND AND THE FEDERAL DISABILITY INSURANCE TRUST FUND.

(a) In General- Section 201(d) of the Social Security Act (42 U.S.C. 401(d)) is amended--

(1) by inserting `(1)' after `(d)';

(2) by striking `Such investments may be made only' and inserting the following: `Except as provided in paragraph (2), such investments may be made only';

(3) by striking the last sentence; and

(4) by adding at the end the following new paragraph:

`(2)(A) The Managing Trustee shall determine the annual surplus (as defined in subparagraph (B)) for each of the Trust Funds as of the end of each fiscal year. The Managing Trustee shall ensure that such annual surplus is invested, throughout the next following fiscal year, in--

`(i) marketable interest-bearing obligations of the United States or obligations guaranteed as to both principal and interest by the United States, purchased on original issue or at the market price, or

`(ii) certificates of deposit in insured depository institutions (as defined in section 3(c)(2) of the Federal Deposit Insurance Act).

`(B) For purposes of this paragraph, the `annual surplus' for either of the Trust Funds as of the end of a fiscal year is the excess (if any) of--

`(i) the sum of--

`(I) in the case of the Federal Old-Age and Survivors Insurance Trust Fund, the amounts appropriated to such Trust Fund under paragraphs (3) and (4) of subsection (a) for the fiscal year,

`(II) in the case of the Federal Disability Insurance Trust Fund, the amounts appropriated to such Trust Fund under paragraphs (1) and (2) of subsection (b) for the fiscal year, and

`(III) in either case, the amount appropriated to such Trust Fund under section 121(e) of the Social Security Amendments of 1983 for the fiscal year, and any amounts otherwise credited to or deposited in such Trust Fund under this title for the fiscal year, over

`(ii) the amounts paid or transferred from such Trust Fund during the fiscal year.'.

(b) Effective Date- The amendments made by this section shall apply with respect to annual surpluses as of the end of fiscal years beginning on or after October 1, 2005.


SEC. 3. PROTECTION OF THE SOCIAL SECURITY TRUST FUNDS FROM THE PUBLIC DEBT LIMIT.

(a) Protection of Trust Funds- Notwithstanding any other provision of law--

(1) no officer or employee of the United States may--

(A) delay the deposit of any amount into (or delay the credit of any amount to) the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund or otherwise vary from the normal terms, procedures, or timing for making such deposits or credits, or

(B) refrain from the investment in public debt obligations of amounts in either of such Trust Funds,

if a purpose of such action or inaction is to not increase the amount of outstanding public debt obligations, and

(2) no officer or employee of the United States may disinvest amounts in either of such Trust Funds which are invested in public debt obligations if a purpose of the disinvestment is to reduce the amount of outstanding public debt obligations.

(b) Protection of Benefits and Expenditures for Administrative Expenses-

(1) IN GENERAL- Notwithstanding subsection (a), during any period for which cash benefits or administrative expenses would not otherwise be payable from the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund by reason of an inability to issue further public debt obligations because of the applicable public debt limit, public debt obligations held by such Trust Fund shall be sold or redeemed only for the purpose of making payment of such benefits or administrative expenses and only to the extent cash assets of such Trust Fund are not available from month to month for making payment of such benefits or administrative expenses.

(2) ISSUANCE OF CORRESPONDING DEBT- For purposes of undertaking the sale or redemption of public debt obligations held by the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund pursuant to paragraph (1), the Secretary of the Treasury may issue corresponding public debt obligations to the public, in order to obtain the cash necessary for payment of benefits or administrative expenses from such Trust Fund, notwithstanding the public debt limit.

(3) ADVANCE NOTICE OF SALE OR REDEMPTION- Not less than 3 days prior to the date on which, by reason of the public debt limit, the Secretary of the Treasury expects to undertake a sale or redemption authorized under paragraph (1), the Secretary of the Treasury shall report to each House of the Congress and to the Comptroller General of the United States regarding the expected sale or redemption. Upon receipt of such report, the Comptroller General shall review the extent of compliance with subsection (a) and paragraphs (1) and (2) of this subsection and shall issue such findings and recommendations to each House of the Congress as the Comptroller General considers necessary and appropriate.

(c) Public Debt Obligation- For purposes of this section, the term `public debt obligation' means any obligation subject to the public debt limit established under section 3101 of title 31, United States Code.

[Frenchy]

The "lock Box" that never existed.