The quick answer is… as Democratic presidential candidate says.. IT DOESN’T.
Sen. Bernie Sanders points out that your Social Security payroll taxes have not, are not, will not contribute “one penny” — or “one nickel” — to the deficit.
However, recently FactCheck.org claims that the fact the revenue from your payroll taxes simply “exists” means it contributed $73 billion to the deficit in 2014.
Their logic is convoluted and hard to follow. If you care to, here’s the link. “Sanders MISLEADS (my emphasis) on Social Security” – http://www.factcheck.org/2015/10/sanders-misleads-on-social-security/
Their use of the word “misleading” is in fact, misleading.
Does Social Security “contribute” in some way to annual federal deficits and/or the overall national debt or not? Well, only in the sense that SS, having its own revenue source (payroll taxes and spends only what it takes in) has seen a drain off of its annual surpluses being “loaned” under the full, faith and credit of the USA to the US Treasury.
And, despite claims to the contrary, SS is not a flawed system – or a “ponzi scheme” – the actuarial estimates are spot-on – that’s the reason the Trust Fund exists. Population trends – that is workers vs beneficiaries – are and were accurately predictable. What’s flawed is the accounting methods and the theory that the trust fund was in some sort of lock-box. It wasn’t and since it wasn’t it’s been tapped to fund a string of deficit-spending budgets.
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