Ron Paul's Texas Straight Talk - A weekly Column

August 27, 2001

Congressional Spending Threatens your Retirement
Decades of Waste are Responsible for the Threat to Social Security

President Bush has been criticized in recent weeks over forecasts that the federal budget surplus will be smaller than expected at the end of 2001. Some in Congress and the media have even attempted to assert that the president's modest tax cut is somehow threatening the Social Security trust fund! This is preposterous- the economic slowdown causing the decline in federal revenues unquestionably began in the last year of the Clinton administration. The hypocrisy of the president's critics is especially galling when so many of the same politicians are the biggest spenders in Congress. After all, it is their massive unconstitutional spending which is the real threat to your Social Security dollars.
Unfortunately, the American people have been misled about how Congress spends Social Security funds. When FDR implemented the system in the 1930s, it was touted as a sensible pension plan for the working class. Most believed that Congress would put their money away for them, let it grow, and pay them a monthly retirement benefit roughly comparable to a private pension plan. In other words, the system was supposed to be a retirement savings plan, not a tax. It certainly was not supposed to serve as a massive slush fund for Congress.
The problem, however, is that Social Security is not run like a private pension plan- it's run like a pyramid scheme by a Congress that cannot stop spending. Every dollar collected is spent. There is no account full of money with your name on it- indeed, the Social Security trust fund exists only on paper. Your federal retirement benefits are nothing more than a Treasury department IOU. The money withheld from your paycheck goes to pay current retirees- and there's no guarantee that revenues will exist to pay your benefits when you retire.
The spendthrift Congress also raids Social Security to pay for a wide variety of completely unrelated pork barrel programs. In fact, this practice has become commonplace over the last decade. Congress consistently wants to spend more than the Treasury collects in general revenues each year, even in boom times when revenues are very high. At the same time, every administration is eager to claim a balanced budget. So Congress uses simple accounting tricks and spends your retirement dollars to fund an ever-growing list of programs, agencies, and federal employees. This practice amounts to nothing more than stealing from our nation's senior citizens, who spent their entire working lives paying into the Social Security system.
Fortunately, however, the public has become aware of the unconscionable spending of their Social Security dollars. Congress finally passed "Lockbox" legislation last year, although many members undoubtedly jumped on the bandwagon only when public pressure and scrutiny became intense. I'm pleased that the nonpartisan National Taxpayers Union named me as one of only seven in Congress who voted not to spend even one penny of Social Security funds on other government programs in 1999 and 2000.
When your Social Security payments are spent rather than saved, the viability of the entire system is threatened. We need to understand that the nation's demographics do not bode well for the future. The World War II generation has a much larger generation below it (the baby boomers) paying into the system. However, 20 years from now the situation will begin to be reversed, with millions of retired boomers relying on a much smaller generation of workers. Those same boomers also can be expected to live longer than any previous generation, putting further strain on the system. It's time to reexamine the system and force Congress to keeps its hands off of Social Security revenues. Remember, you deserve to get back every penny you pay into Social Security over decades of your working life.