October 30, 2014

CONCORD COALITION REMINDS CONGRESS: THE SURPLUS IS ALREADY EARMARKED FOR SOCIAL SECURITY

WASHINGTON--While Congress debates tax cuts and spending increases, the Concord Coalition today reminded lawmakers that the budget surplus projected for this year and the next decade is already earmarked--for Social Security.

"Policy makers who are lining up to spend those so-called budget surpluses should keep in mind that the money they are talking about consists entirely of Social Security's annual trust fund surpluses," said Concord Coalition Executive Director Martha Phillips. "We should be saving these surpluses to prepare for the retirement of the baby boomers, which will put a huge financial strain on future taxpayers."

A recent report from the Congressional Budget Office projects that the annual Social Security trust fund surplus and the unified federal budget surplus for the current year and the coming decade combined will both be roughly $1.6 trillion. In fact, if the Social Security trust fund surpluses are not counted, the federal government will run a combined $12 billion deficit during that period.

Concord remains concerned that the misunderstanding about the nature of the unified budget surpluses is leading to a breakdown in fiscal discipline. It is inconsistent for Congress to say that Social Security is "off-budget" while at the same time using the Social Security surplus to pay for tax cuts or new spending.

 

THE BOTTOM LINE
Budget deficits and surpluses, by fiscal year
  In billions of dollars**
Fiscal Year 1997
Actual
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998-2008**
On-budget Deficit/Surplus -103 -41 -37 -46 -45 1 -10 * 5 44 55 64 -12
Off-budget Surplus 81 104 117 125 131 138 146 154 165 173 181 186 1621
Unified Budget -22 63 80 79 86 139 136 154 170 217 236 251 1609
* - deficit of less than $500 million
** - totals do not add due to rounding

Source: Congressional Budget Office The Economic and Budget Outlook, An Update: August 1998