Word: budgeted
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Dates: during 1980-1989
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...than it pays out in benefits. Federal officials expect the accumulated surplus to exceed $100 billion by December and, in the next 40 years, to mushroom to $12 trillion. Every penny will be needed to pay for the future retirement of today's 24- to 42-year-olds, the budget-busting baby boomers. But as the stockpile grows, so does the urge to raid the reserves. After all, the 21st century seems so far away...
...surplus can be invested only in Government-insured securities. So far the trust fund has been used to buy Treasury issues -- in effect, financing part of the federal budget deficit. Legislators, however, have proposed using the money for everything from expanding current Social Security benefits to paying for housing for the homeless. Others clamor for a tax cut. Many Washington watchers fear that the Government will simply fritter away the reserve, leaving nothing to the future. Says Geoffrey Carliner, executive director of the National Bureau of Economic Research in Cambridge, Mass.: "As politicians see the trust fund build...
...better strategy, says Democratic Senator Daniel Patrick Moynihan of New York, would be to save the surplus and, in the process, put the U.S. back on solid financial ground. His plan: continue buying Treasury securities. If Congress were actually to balance the budget, the Government could use the Social Security surplus to buy back gradually the nation's $3 trillion debt from its domestic and foreign owners. Instead of tying up their resources in Government IOUs, investors would have to funnel their assets into private industry. This would promote economic growth. The process, says Moynihan, "will put the federal budget...
...however, lawmakers have already used the pension reserve for a far less noble cause -- to help mask a big part of the federal deficit. Since Social Security receipts count as part of the overall budget, congressional projections indicate that the deficit should gradually shrink from $150 billion in 1987 to $134 billion in 1993. Without Social Security's extra padding, however, lawmakers would be forced to admit an unpleasant reality: the deficit resulting from all other Government programs will actually grow from $170 billion in 1987 to $231 billion in 1993. Says Bosworth: "The basic budget deficit is getting worse...
Other experts worry about just the opposite possibility: that the Social Security program will push the overall budget substantially into surplus. If Government revenues far exceed spending, less money will be available for businesses and consumers. That could produce a drag on the economy or even a recession. Already, says Robert DiClemente, a senior economist at Salomon Brothers, "many people are now paying higher ((Social Security and Medicare)) payroll taxes than income taxes." The thing to do, argues Robert Myers, chief actuary of the Social Security Administration from 1947 to 1970, is to cut the payroll tax so that...