Keeping It Straight: DEBUNKING SOCIAL SECURITY LIES

There are many, many bald-faced lies about Social Security that need to be addressed and debunked regularly in hopes of dragging the intellectually challenged back to the real world. It is truly sad the number of people who just pass on internet garbage without doing a modicum of checking, relying instead on fools who also just pass along trash - and also without checking.

The one major lie that seems to be the favorite of listeners to right wing loons on the radio is that the Democrats robbed the Social Security trust fund. More specifically the lie is that President Lyndon Johnson and the Democrat controlled Congress took money from the Social Security Trust fund and put it into the general fund so the government could spend it - a simple lie. No funds from the Social Security trust have ever been placed in the general fund. The trust fund consists of about $2.8 trillion derived from the excess in payroll taxes over the past three decades exceeding benefit payouts, and by law - unchanged since the 1930s - the trust fund can only invest in federal treasury bonds. What the dim bulbs failed to understand is in 1969, Social Security and other federal programs that operate through trust funds, were counted officially in the budget. Beginning in the late 1970s, Social Security faced financial problems, and over a period of time legislation was enacted to restore the financial health of the program. However, because the federal budget deficit remained large, interest in reducing Social Security spending continued. In response to this concern, a series of measures were enacted in 1983, 1985, and 1987 that included tax hikes - under the Reign of Error of Ronald Reagan, a Republican.

Another lie is that President Roosevelt promised participation in Social Security would be entirely voluntary. There was no provision in the Social Security Act of 1935 (nor has there ever been any such provision) for the payment of Social Security payroll taxes to be voluntary. Since the inception of the program, the law has required that payroll taxes for persons working at jobs covered by Social Security "shall be collected by the employer of the taxpayer by deducting the amount of the tax from the wages as and when paid."

It has also been claimed that participants would only have to pay 1 percent of their first $1,400 of their annual income into Social Security. Social Security taxes were never limited to the first $1,400 of annual income, nor was there any provision in the Social Security Act of 1935 to permanently fix the tax rate at 1 percent. The Social Security Act of 1935 set the original rate at 1 percent of the first $3,000 of annual income, with provisions to gradually increase the rate to 3 percent over the next twelve years:

1) With respect to employment during the calendar years 1937, 1938, and 1939, the rate shall be 1 per centum.

(2) With respect to employment during the calendar years 1940, 1941, and 1942, the rate shall 1 1/2 per centum.

(3) With respect to employment during the calendar years 1943, 1944, and 1945, the rate shall be 2 per centum.

(4) With respect to employment during the calendar years 1946, 1947, and 1948, the rate shall be 2 1/2 per centum.

(5) With respect to employment after December 31, 1948, the rate shall be 3 per centum.

Liars claim the money participants put into the program would be deductible from their income for tax purposes each year. The original Social Security Act of 1935 specifically stated that Social Security payroll taxes were not to be allowed as income tax deductions: "For the purposes of the income tax imposed by Title I of the Revenue Act of 1934 or by any Act of Congress in substitution therefore, the tax imposed by section 801 shall not be allowed as a deduction to the taxpayer in computing his net income for the year in which such tax is deducted from his wages."

Social Security payroll taxes have never been deductible from income for tax purposes, either when the program was originally instituted or at any time since.

Another lie is money put into the independent "Trust Fund" rather than into the general operating fund, and therefore, would only be used to fund the Social Security retirement program, and no other government program. The Social Security trust fund was established in 1939 to receive moneys collected for Social Security through payroll taxes. The moneys in this fund are managed by the Department of the Treasury; they are not, nor have they ever been, put into the "general operating fund." The Social Security Act specifies moneys in the fund may only "be invested in securities backed by the full faith and credit of the federal government," such as treasury bills, treasury notes, and treasury bonds, as well as special issue bonds.

Annuity payments to the retirees would never be taxed as income. While it is true Social Security benefits were not originally considered taxable income, that status was not due to any promise or act on the part of President Roosevelt, nor was it specified in the Social Security Act (or any other law); it was the result of a series of rulings by the Treasury Department in 1938 and 1941 that excluded Social Security benefits from federal income taxation. Those rulings were overridden by amendments to the Social Security act enacted in 1983 under the Reign of Error of Ronald Reagan - a Republican.

A pair of specious questions 1) Which political party eliminated the income tax deduction for Social Security (FICA) withholding? And 2) Which political party started taxing Social Security annuities? With both questioning being answered by lies stating the Democrat Party. Prior to 1984, income derived from Social Security benefits was exempt from taxation. Amendments to the Social Security Act passed by Congress in 1983 - under the Reign of Error of Ronald Reagan, a Republican - allowed for 50 percent of Social Security benefits to be considered taxable income for taxpayers whose total income exceeded specified thresholds.

This lie is really funny - yet often repeated by those lacking intelligence. Which political party decided to start giving annuity payments to immigrants? And as usual the right wing loon idiot fringe responds with "That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!" Now for the facts - no one - whether he be a citizen, immigrant, or illegal alien - is eligible to collect Social Security benefits unless he (or someone else, such as a parent or spouse) has paid into the system. The right wing loon fools have confused Social Security itself with Supplemental Security Income (SSI) - the latter is a federal welfare program "designed to help aged, blind, and disabled people, who have little or no income" by providing "cash to meet basic needs for food, clothing, and shelter." Immigrants can qualify for SSI benefits under certain conditions, but SSI is financed by general revenues and not Social Security taxes. SSI was not enacted by the administration of President Jimmy Carter; it was created and signed into law in 1972, during the administration of President Richard Nixon, a Republican.

Many of the misguided actually believe there is a Bob Smith or Mary Jones account full of the moneys they put into the system over the years. Not so. Social Security is not an investment fund, but rather a pay-as-you-go system transferring money from current workers to retirees. I paid for the retirees when I was working and now those working are paying me. As simple as that is to comprehend nearly one-third of the uneducated actually believe they have dedicated Social Security accounts.

And of course many of the weak-minded like to shout that Social Security is going broke and heading for bankruptcy. Another lie designed to stir the ire of those too stupid to actually check the facts. The current payout level can be maintained at least through 2034, when if reforms are not put in place the pay-out rate would drop to about 75% of today's level. Reforms are not difficult with the easiest being an elimination of the earnings cap that is currently set at $118,500 with a change to every dollar received (notice I did not say "earned") taxable for FICA. That simple change would insure the funding of the program for time and all eternity.

In looking back I see where it has been five years since I last shared this information and I am still astounded at the number of people who fall for the lies about what is one of the most successful government programs ever put in place to benefit the average person. Social Security has, since its inception, never missed payments to recipients.