Office of Management and Budget, Jack Lew's Social Security Lie

Want to hear something funny? Jack Lew is the director of the Office of Management and Budget in Congress. He has been hitting the NPR airwaves with a talking point that is clearly a lie. See if you agree.

[Social Security] doesn’t contribute to the deficit this year, or next year, or in this 10-year window, or even for a long time beyond that.

Ok, so Social Security, whose funds have been raided by Congress and were never put into a lock box account like it was intended, is now totals many trillions of dollars in UNFUNDED liabilities, which almost everyone realizes as the system is now predicted to run out of cash in just over 4 years. So where is the government getting the money to pay for these UNFUNDED liabilities without going into debt?

Lew continues:

Specifically, looking to the next two decades, Social Security does not cause our deficits.

Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries.

Is Lew the only one ignoring the reports Social Security will soon be bankrupt, and to become bankrupt means you can't afford to pay your debts because you are so upside down? The problem comes from the fact that Congress never looked at Social Security as a lock box, and instead they used the money to provide more entitlements. The 1983 plan to save Social Security only encouraged more mismanagement.

From National Review:

Congress changed the law in 1983 so that in any given year, current taxpayers pay more in taxes than the program needs to pay all the benefits, it also required that the program invest the difference, or surplus, into trust funds, which can only invest money in special-issue Treasury bonds. No other bonds, just Treasuries.

And what has Treasury done with the money? Well, the federal government has spent it on its daily consumption: education, loan guarantees, wars, etc. In other words, the government has already spent the money it received in exchange for the IOUs.