I’m not sure that description is entirely correct.
There was a time when Social Security was a “positive investment”. The fact was, the SSF (*social security fund) was growing faster than societal needs required.
I want to say it was in the 60’s…but don’t quote me. My college degrees were many years ago. Regardless…the end result was that there was such a predicted surplus of dollars in the social security fund that one Party (Demo’s, IIRC) proposed what has now been called “Raiding the Fund”…and pulled a chunk of money out of SSF.
An exerpt worth reading: https://www.ssa.gov/history/BudgetTreatment.html
THE ACCOUNTING PROCEDURES
"Off-Budget"-
The Constitution (Article 1, section 9, clause 7) describes a very general federal budgeting process, requiring only that: "a regular Statement and account of Receipts and Expenditures of all public Money shall be published from time to time." Over the nation's history, the procedures involved in federal budgeting have varied a great deal, with a few major changes. (For a highlight summary of some important milestones see the excerpt from the Senate Budget Committee's report on the budget process.)
Modern federal budgeting has its origins in The Budget and Accounting Act of 1921. This law formalized the budget process. It regularized the process of the President producing an annual budget and submitting it to Congress in a specified procedure; it also created the Bureau of the Budget within the Office of the President (later renamed the Office of Management and Budget); and it created the General Accounting Office within the Congress to oversee the administrative branch's budget execution. From that point on, the President and his budget office controlled the presentation and content of the federal budget, and the appropriations committees in the Congress received the President's budget and acted upon it.
Trust funds are not exclusive to the Social Security program, nor were they new with its passage. At the present time, there are somewhere in excess of 150 different trust funds managed by the federal government. At the time of the passage of the Social Security Act in 1935 there were already in existence two major trust funds--those involved in the Civil Service Retirement System and the Government Life Insurance Fund established to insure World War I soldiers and their families. Trust funds have often been displayed separately in the federal budget, although their precise treatment has varied over time.
(For a detailed explanation of the federal budget process--with historical background--see the Senate Budget Committee's publication The Congressional Budget Process.)
From the beginning of the Social Security program its transactions were reported by the administration as a separate function in the budget. This is sometimes described in present usage by saying that the Social Security program was "off-budget." This was the budget representation of the Social Security program from its creation in 1935 until 1968.
"On-Budget"-
In early 1968 President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a"unified budget." This is likewise sometimes described by saying that Social Security was placed "on-budget."
This 1968 change grew out of the recommendations of a presidential commission appointed by President Johnson in 1967, and known as the President's Commission on Budget Concepts. The concern of this Commission was not specifically with the Social Security Trust Funds, but rather it was an effort to rationalize what the Commission viewed as a confusing budget presentation. At that time, the federal budget consisted of three separate and inconsistent sets of measures, and often budget debates became bogged-down in arguments over which of the three to use. As an illustration of the problem, the projected fiscal 1968 budget was either in deficit by $2.1 billion, $4.3 billion, or $8.1 billion, depending upon which measure one chose to use. Consequently, the Commission's central recommendation was for a single, unified, measure of the federal budget--a measure in which every function and activity of government was added together to assess the government's fiscal position.
This change took effect for the first time in the President's budget proposal for fiscal year 1969, which President Johnson presented to Congress in January 1968. This change in accounting practices did not initially put the President's budget proposal into surplus--it was still projecting an $8 billion deficit. However, it is clear that the budget deficit would have been somewhat larger without this change (it is difficult to say how much larger because this change was mixed-in with the other legislative, budgetary and fiscal policies the President was urging Congress to adopt). In early 1969--just five days before leaving office--President Johnson sent his 1970 budget message to Congress, also using the revised accounting procedures. At this point, a year later than his initial estimate, he was projecting the budget for 1969 to be in a net balance of $2.4 billion. (The fiscal year 1969 began on January 1, 1969, even though the President had released his FY 1969 budget almost a year earlier.)
The FY 1969 budget would not be implemented by President Johnson; it would instead be presided over by President Nixon, who took office on January 20,1969. This was 20 days into the 1969 fiscal year. When President Nixon took office, he too adopted the unified budget approach, and it was used by all Presidents thereafter until 1986.
And then: Fast forward, Reagan years…https://www.ssa.gov/history/Interne...l Security,an overwhelmingly bi-partisan vote.
Yeah, then the Fed started Taxing the distributions that were effectively provided by We The People making mandatory deposits.
Translation of the past 80 years or so…: the SSFund was well and good…so good in fact that the Excess that it was generating far exceeded expected needs. And so, it was blended into the regular fund (aka, “Raided”) so as to created a balanced budget.
And then the distributions were taxed under the argument that since they were a pre-tax fund at the start, they should be taxed when distributed.
Over time, the Fund, which was so successful, got thinner and thinner based on being “balanced”…and then factored life expectancy and growth projections…and, well, welcome to today.
Stating that the “fund was raided” is indeed a fair response. Both parties have happily gone after its golden coffers.
I’m 55…between my wife and I, SSN is a darn significant chunk of money. About $6k in retirement per month. Yeah, I have a nice 401k and investments…but that’s not the point. I paid into a fund…I expect to be paid out. That’s the principal of it.
Anything less is just a Tax, buried in a white lie.
