Why not a law preventing the Social Security lockbox from ever again being looted?

[brentspeak]

First thing Bush did once he got into office was make a bee-line for the Social Security lockbox to pay for his tax-cuts for the super-rich. Bush and his cronies looted the lockbox like private equity smash-and-grab three-piece-suited takeover criminals use their new keys-to-the-kingdom to loot their new company's employee pension fund safe.

[DesertFlower]

1. sound good to me. nt

[RUMMYisFROSTED]

2. Because it could be undone as easily as it could be done.

Iow: Meaningless

[brentspeak]

3. So, is there any law that can't be easily made "meaningless"?

If not, what's the point of us having a legislative government at all?

[boppers]

4. Because consensus laws are kept.

There would have to be a consistent, multi-year, multi-party, consensus to isolate SS revenue, regardless of any recessions, wars, natural emergencies, health care crisis, etc.

[RUMMYisFROSTED]

6. No.

Ideally, you hope for representative law.

[Lasher]

5. The Social Security trust funds have not been looted - so far.

The trust funds are holding US Treasury Bonds as it was planned they would. To say that the trust funds have already been raided is to fall for the right wing bullshit about 'worthless pieces of paper'.

The best thing to do about Social Security is nothing at all until all the Treasury Bonds, or nearly all of them, have been redeemed by the general fund that borrowed from the trust funds in the first place. Enemies of our social programs are in a panic because the time is drawing near when the general fund will have to start paying off these treasury bonds, and their intention is that not a single one will ever be redeemed. You see, that is just how the trust funds would be looted and like I said it hasn't happened. And it won't come about unless we let it.

Most people don't realize how we dodged a bullet when Congress recently rejected a proposal to fast track Social Security, Medicare, and Medicaid cuts. This being the case, we still have the filibuster to block any and all social program cuts that Obama's commission or anyone else comes up with.

[cutlassmama]

10. Obama has convened a group that will do just that, cut Medcare, SS, and Medicaid

in November. The "group" will do it...that way he can't be blamed for it.

[Lasher]

11. Yes, that's what I meant when I mentioned Obama's commission.

But since Congress wouldn't concede fast track authority, there are two things working in our favor that otherwise would not have been: We still have the Senate filibuster to employ as I mentioned before, and Congress is not obliged to bring up any commission recommendation for a vote.

When you say Obama can't be blamed for it I understand that is the way a lot of people are thinking. But I disagree. I'm just one person but I blame him quite a bit for this. I fully expected him to draw a line in the sand concerning social program cuts and in this he has failed miserably.

OBAMA: We’re going to have to capture some revenue in order to stabilize the Social Security system. You can’t get something for nothing. And if we care about Social Security, which I do, and if we are firm in our commitment to make sure that it’s going to be there for the next generation, and not just for our generation, then we have an obligation to figure out how to stabilize the system. I think we should be honest in presenting our ideas in terms of how we’re going to do that and not just say that we’re going to form a commission and try to solve the problem some other way.

CLINTON: With all due respect, the last time we had a crisis in Social Security was 1983. President Reagan and Speaker Tip O’Neill came up with a commission. That was the best and smartest way, because you’ve got to get Republicans and Democrats together. That’s what I will do.

OBAMA: That commission raised the retirement age, and also raised the payroll tax. So Sen. Clinton can’t have it both ways.

2008 Democratic primary debate in Philadelphia, April 16, 2008

http://www.ontheissues.org/Celeb/Barack_Obama_Social_Security.htm

[WinkyDink]

15. More money for the Pentagon to engender dead American soldiers for natural gas and heroin.

[Lasher]

17. That's just what's going on, Winky.

More money for that, more for rich people's tax cuts, more for big pharma, insurance companies, banks, etc. We have big fiscal problems for sure, but it is morally reprehensible to gut our solvent social programs so that the general fund can renege on the Treasury Bonds in the trust funds.

[WinkyDink]

24. The older I get, the more I see us as (would-be) conquerors, resources-thieves, and drug-runners.

E.g., NO WAY could there be a world-wide multi-billion-dollar drug "business" without the CIA's co-operation if not collusion.

[suston96]

7. Why not what? Because there ain't no such thing as a lock box........

Social Security and Medicare payroll collections all go into the US Treasury general collections (the government check book). The individual social security retirement accounts and the Social Security and Medicare Trust Funds are simply accounting records that reflect the balances in those accounts.

But try http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

[dkf]

8. Yup. It's pretty incredible people don't realize an IOU to pay yourself ain't worth squat.

Oh my checking account owes my savings account 20,000 dollars. Yeah right.

[suston96]

18. That's not the way it works.

Try here: http://www.ssa.gov/OACT/ProgData/fundFAQ.html#n1

"Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government."

Those worthless IOUs earn interest which is much needed income to the Trust Funds over and above what is collected from payroll taxes.

Payroll taxes? H'mm. Does that mean that if all those lost jobs, and then some, come back the SS and Medicare Trust Funds would have a serious windfall? Maybe take us to the 22nd Century before they go bust?

[dkf]

19. They are just bookkeeping. In effect, an IOU to ourselves.

"The Office of Management and Budget has described the distinction as follows:

These balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337)"

http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

And a "surplus" in the trust fund is not required to be paid out. If the age of retirement is raised to keep inflows matching outflows, and is a pay as you go system as it was originally intended, a surplus would exist in perpetuity.

I'm surprised liberals aren't more suspicious of the "surplus" in the trust fund as it was pretty much created by Ronald Reagan, whose strategy was to "starve the beast", creating such deficits and a lack of funding that Reagan and crew viewed fiscal catastrophe as the only possible way to end entitlement programs.

I see the "surplus" as the device used to make the lower/middle class happy about paying more taxes while decreasing taxes on the rich, making the income tax flatter throughout the brackets.

They tell us schmucks that it really represents money we will be getting back later, but create a future environment where it is impossible to pay on these promises.

It is Ronald Reagan's hugest scam ever.

[suston96]

21. The future environment is what they are talking about....

Too many retirees and not enough jobs creating the income to those Frust Funds to secure that future environment.

I don't buy into all this whining about the Trust Funds nor the hand wringing about our grandchildren. I heard the same stuff when I was in my twenties and I remember wondering what would happen when I was ready to retire.

Well, nothing happened. Everything worked as I expected. And when all the boomers retire, they have already started to, they will get their checks and monthly direct deposits just as I am.

Jobs growth is our best course. Now!

[Ozymanithrax]

9. It isn't a lock box. It is a dedicated separate tax with a trust fund invested in...

U.S. Bonds.

See "About the Social Security trust fund - Paul Krugman 2008"

Krugman saw then a looming crises in the General fund.

[jeanpalmer]

26. Krugman's article was written in March 2008

Since then the Federal Government's financial position, and its financial outlook, has taken a severe turn for the worse. And that gets to the heart of the trust fund issue, which is, will the Government have the financial ability to sell the bonds that will be needed to pay back the funds it borrowed from the SS trust fund? Krugman ignores the issue, obviously making the assumption that the the Government's ability to sell bonds will be there. But that turns out to be a major assumption which may be false.

Beyond the ability to sell bonds, there's a question of the Goverment's willingness to do so. But, the argument goes, the Federal Goverment has a legal obligation to pay off the bonds. Sure it does, but it also controls the obligation on the other end with regard to the level of SS payments to the elderly that will require the selling of the bonds. So if the Government doesn't want to sell bonds to pay off SS bonds, all it has to do is reduce SS payments. And from what we've been hearing lately, especially from Obama with his commission, it appears there is some unwillingness to sell the bonds.

There's also a question of the people's willingness to sell bonds. Already we've seen a mini-revolt among some people over the high level of deficit spending. And we're only at the begining of that problem. Obama's own budget projections do not project a budget deficit less than $700 billion over the next ten years. So how likely is it that the country will tolerate the selling of bonds at the rate of $700 billion a year, and then sell more to pay off SS? Again, Krugman seems oblivious to this problem.

People refer to a "trust" fund, but is it really a trust fund? A trust fund is usually required to look out only for the interests of the beneficiaries, and trustees are not allowed to engage in self dealing. In lending SS funds to the government in a not-at-arms-length transaction, have the SS trustees fund violated their fiduciary duty? I say yes, if it's really a trust fund. More likely though it's not a trust fund, but just a gimmick to funnel money to the general budget. How do we know this? Because long before money from the trust fund is needed to pay SS recipients (payroll taxes by themselves will pay recipients until 2017-2018, according to estimates), politicians are hinting at cutting benefits/raising payroll taxes. There's will be an excess of payroll taxes over SS payments for 7 more years, so there's no need to cut benefits/raise payroll taxes at this time, unless your intent is to use the "savings" or extra taxes to fund the general budget.

The Government says there's a trust fund, then uses the trust fund surplus as general revenue. And then proposes benefit decreases/tax increases, which the politicians will funnel to the general budget, to pay for wars and things. How about instead imposing a general tax increase on the rich and dedicating the money to SS? Just for once. Can you imagine these politicians doing that?

[Bitwit1234]

12. He learned from Reagan to do that didn't he.

Reagan took most of the funds to balance HIS budget. He was the start of the ruination of our economy with his tax cuts for the rich.

[golfguru]

13. I have advocated that for 20 years...eom

[Jennicut]

14. Didn't Al Gore have this idea back in 2000? I am vaguely remembering the words "lock box".

[WinkyDink]

16. He was famous for the idea, which, of course, meant it became widely mocked.

[troubledamerican]

25. NBC's Saturday Night Live mocked Al Gore in 2000 for saying "Lockbox" -- Links

http://snltranscripts.jt.org/00/00adebate.phtml

http://www.videosift.com/video/Al-Gores-Lockbox

[COLGATE4]

20. That's what Al Gore proposed

And for which he was unmercifully vilified : "Lock box, lock box, lock box, yawn".

[Igel]

22. Because it wouldn't make any sense.

Think about it.

Let's say that the SS Trust Fund has an extra $300 billion in it. Where do you put the money?

Do you loan it to the US government? If so, that's what's been termed "looting." Since the goal is to prevent "looting," that's what you want a law to prevent. A law passed by Congress saying that any SS surplus can't be touched by Congress--so presumably the SS administrators are in charge of it. Okay, I'll play.

So where do they put the money? In stocks? In bonds? Derivatives? In securities issued by another government? Does it buy land? Mortgages? Gold? Pretzels?

Do you just put it in a bank (or banks)? CDs? A money market account with Schwab?

Where do they put it so that Congress can't use the money and so that the money is still reasonably safe?

[golfguru]

23. You invest it in AAA rated Utility Bonds

That is where I put my money and hold it to maturity.
Never had a default or loss of capital.

There are other tons of highly rated bonds out there from US &
Foreign corporations and also from Soverign governments. With
the humongous diversification US Treasury could get from the SS
surplus money, there is almost no chance of loss of capital.

[rasputin1952]

27. You keep the money in the fund...

It is there for a reason, to pay future claims. The SS recipients have just become the Boomers, considering the extended lives of people, and the influx of the Boomers, the intelligent thing would have been to leave the money where it was sent to ensure the solvency of of SS. I guess that is asking too much from Congress.

The same thing happened in many states w/the suit $ from tobacco. The settlement stated the money was to go to anti-smoking campaigns and treatment for those who had tobacco related ailments. In all of the states that received the money, it wound up in the General Fund, and was spent on just about everything but what it was decreed to be spent on.

We, the people, are the one's truly responsible for ensuring things go according to plan. For far too long, we have fallen on that simple responsibility, and keep re-electing the same jerks into office, whether it be local, state or national.

Locally, a half-cent tax was implemented to build and equip an auxiliary firehouse, and fund economic development. The "development fund" was put on hold because of a legal quirk, and the money was supposed to be held until the problem was solved. Within 90 days, the money was gone, and there was no "development". I had stated in a City Council Meeting that the money would be heisted about 3 months before the tax went into affect. The only good thing, the biggest crook of all was not re-elected, however, he got some of the funds anyway. The only taxpayer money he should have gotten...was a taxpayer funded trip to prison.

Point is...WE have to clobber these clowns...we vcannot expect the idiots to police themselves, that has never worked.