In a “Dear Republican Party” Facebook post, the group Occupy Democrats suggested that the GOP would use federal deficits and debt as a false pretext to cut Social Security.
“Social Security has nothing to do with the deficit or the national debt,” the post said. “You created that fiction and we are not going to fall for it.”
The January 12 post was flagged as part of Facebook’s efforts to combat fake news and misinformation in its News Feed. (Read more about our partnership with Meta, which owns Facebook and Instagram.)
We previously rated the same statement as mostly false. And one expert says that’s still the case.
“Social Security and the rest of government are much more intertwined than this publication suggests,” said Howard Gleckman, a senior fellow at the Tax Policy Center, which is part of the Brookings Institution, a Washington think tank.
To back up their claim, Occupy Democrats, a self-described political organization and advocacy journalism group, cited a quote from Social Security Administration chief actuary Stephen Goss to PolitiFact. It was in a 2010 article from the liberal Economy Policy Institute.
The article says that when Social Security uses its assets to pay benefits to baby retirees, it contributes to what’s known as the unified budget deficit (more on that shortly), and the authors say that “with time, Social Security cannot increase the federal deficit.
Goss’s comments included in the article, taken from a presentation he gave in 2010, were: “Trust funds enforce long-term budget neutrality. Total spending to date cannot exceed revenue to date.”
Gleckman said things have changed since the article was published in 2010, when Social Security went from running surpluses to running deficits.
“Currently, Social Security generates less income each year than it pays out in old-age benefits,” he said.
Although previously discredited, this claim persists. In another statement about Social Security and deficits that we rate Majorly False, we reported extensively on how Social Security increases the deficit.
The experts told us then that there are two main measures of the federal deficit: the “on-budget” balance, which essentially includes everything except Social Security; and the “unified budget,” which merges budgets inside and outside the budget, and is more common to budget experts and the media.
Social Security adds to the unified deficit.
It’s a pay-as-you-go system: Payroll taxes paid by current workers and their employers go toward paying benefits to current retirees and other Social Security recipients.
From 1984 to 2009, Social Security collected more money in payroll taxes than it paid out in benefits, running a surplus. That surplus was transferred from the Social Security program to the general fund of the federal government. In exchange, the Treasury issued bonds that Social Security could hold in its reserves and redeem to pay future benefits.
The government, in turn, contracted the obligation to return the bonds, plus interest, to the Social Security trust fund.
Starting in 2010, Social Security began running its own deficits and began redeeming bonds, plus interest, from the federal government.
In other words, money was transferred from the government’s general fund to Social Security. The Treasury has to borrow money to make the transfer.
When Social Security runs deficits, “this increases the unified budget deficit dollar for dollar,” Andrew Biggs, a Social Security expert at the conservative think tank American Enterprise Institute, told PolitiFact of the Occupy Democrats’ claim.
In 2022, $56 billion of Social Security reserves were used, Gleckman said.
Occupy Democrats said: “Social Security has nothing to do with the deficit or the national debt.”
Social Security began running deficits in 2010, which means it relies on its reserve funds held by the Treasury Department in the form of government bonds. The Treasury must borrow money to pay off the bonds, which adds to the federal deficit.
The statement contains an element of truth, because when Social Security runs a surplus, it does not contribute to the federal deficit. But by ignoring the last 12 years, when Social Security has run deficits, the statement ignores critical facts that would give a different impression.
We rate it Mostly False.
This fact check was originally posted by PolitiFact, which is part of the Poynter Institute. It is republished here with permission. Check out the sources for this fact check here and more of his fact checks here.