Sen. Harry Reid (D-NV) just doesn’t have a strong grasp of the facts when it comes to Social Security and the debt. Yesterday, at a campaign rally calling on Congress to “Back Off” Social Security Reid again repeated his line that: “Social Security has not contributed one penny to the debt or the deficit.” As FactCheck.org has certified, this is just plain false. The reality is that Social Security added $37 billion to the debt last year and will add another $45 billion to the debt today.
Reid and the rest of his allies on the left are clinging to a myth about what is in the Social Security Trust Fund. The Trust Fund does exist. You can even travel to the sleepy little town of Parkersburg, West Virginia and visit all $2.5 trillion dollars of it. The problem is that the special issue U.S. Treasury bonds inside the nondescript office building where the Trust Fund is kept are not cash. As President Bill Clinton’s OMB noted back in 2000:
These [Trust Fund] balances are available to finance future benefit payments and other trust fund expenditures-but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. 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, make it easier for the government to pay benefits. (emphasis added)
So when Harry Reid says that Social Security has not added a single penny to the federal deficit he is just dead wrong. And the longer Congress delays fixing Social Security, the more that program will add to the debt. Social Security must be reformed now.