Will your Social Security check be in the mail come 2015?
A top economist says the trust fund for Baby Boomers has disappeared. But, there's something you can do!
“Eventually, the government would acknowledge that what it first called a savings account and then called old-age insurance and then said would be fortified by a trust fund did not even establish a contractual obligation to those who have paid the Social Security tax — which would be all of us.
“The politicians believed him,” writes Napolitano, “but the actuaries and the judiciary understood that the government would never hold anyone’s money for him — as if it were the custodian of a bank account. In the first of several challenges to the constitutionality of Social Security, the Supreme Court found that the Social Security fund did not consist of your money. It was merely tax revenue. Did you know that?
“And, in a curious yet revealing one-liner in the Supreme Court opinion upholding the constitutionality of Social Security, even the court recognized that there would be no trust fund in the traditional sense when it found that the tax dollars collected and supposedly designated for Social Security were ‘not earmarked in any way.’
“Thus,” writes Napolitano, “the Feds have conceded and the courts have agreed that the money you have involuntarily contributed to
the so-called trust fund is not yours and can be spent by the government as it pleases, just like any other revenue that the Feds collect.
“Where did it go?” asks Smith. Four administrations, from Reagan to George W. Bush, spent it on myriad non-Social Security efforts, says Smith – so don’t blame the current president.
“Obama didn’t have a chance to use it – it was gone,” Smith says.
The 1983 amendments approved under Reagan generated revenue by accelerating Social Security payroll tax increases, allowing a portion of benefits to be taxed, and delaying cost-of-living adjustments from June to December.