Did Bush fix Social Security, or was Clinton lying, or is it still broke?

Question

Because in 1999 Clinton said it was in trouble over the long term:

"by 2013, payroll taxes will no longer be sufficient to cover monthly payments. And by 2032, the trust fund will be exhausted, and Social Security will be unable to pay out the full benefits older Americans have been promised."
http://www.cnn.com/ALLPOLITICS/stories/1999/01/19/sotu.transcript/

But now the Democrats are saying there's no problem and that all the Republicans who have addressed the issue are wasting time and stirring up discontent for the sake of votes.

So, did Bush fix social security without ever getting legislation passed, was Clinton lying in 1999, or are the Democrats lying now when they say Social Security is going to be there for the younger workers? Is there some alternative I'm missing here?

Answer 1

The Social Security system had a growing surplus until it was destroyed by Ronald Reagan and his pirates. So much money had been "borrowed" from it that there was never any hope that it could be paid back.

SS "taxes" (was not ever supposed to be a tax) started going into the trust fund, which continued to grow. When it became obvious that the system would reach a break-even point and start to decline, noise started to be made about the system failing. No offer to restore it to its former status was considered.

Even so, it will take about 40 years (estimates vary because it depends on how bad the next recession/depression is) for the existing surplus to be exhausted, because of population growth.

The Bush plan was to let people invest their SS "tax" or part of it in government controlled plans. That is, the government would "allow" you to put money into plans where they selected the companies being invested in. That would have freed up the so-called trust fund for use by the government without having to go through the budget process. Doubtful if it would have been used against the mounting deficit that is not included in public statements about the budget and national debt.

The scheme could not be made sanitary enough to get even the Republicans in Congress to make it into a bill. That was the end of it. No, Bush didn't fix it. It continues just from being a shadow of its former size prior to Reagan cutting off its legs and gutting it.

Edit: Read Don C above who posted his answer while I was typing.

Answer 2

Clinton proposed putting the budget surplus into Social Security. Bush spent the surplus and brought us back into a deficit. Most Democrats are now proposing raising the $90,000 cap on which people pay FICA taxes on. Hillary Clinton wants to deal with the challenges by fiscal responsibility . Please site a source which shows a single Democrat saying there's no problem and that all the Republicans who have addressed the issue are wasting time and stirring up discontent for the sake of votes.

Answer 3

A few things. But no, Bush sure didn't fix SS! His Medicare prescription plan though is helping it go broke. Much too expensive but the government gets to borrow from the Medicare and SS surplus-and they don't have to report it as debt! I remember seeing Bush on TV saying the SS fund was just a bunck of IOUs. That's correct except that the IOUs are owed to US citizens by its government and the IOUs are US Treasuries, fully backed and guaranteed by the US government.

The timeline for the surplus to run out has changed-I see even 7-10 years now. That is untrue. so, SS needs to be tweaked somehow(and there are many choices) but it is not in danger of going broke in 10 years unless the US won't pay us back.

SS needs to be dealt with but could easily be fixed-but the politicians don't want to touch it. And I can't tell you what a terrible, expensive bill medicare part d was.

The government should not be able to borrow from SS-everyone laughed about Al Gore and his "lockbox" but that is what he was talking about.

By the way, SS is a program not just to help the poor but to keep people off the povety rolls so the government doesn't have to support them.

Answer 4

Social Security is still broken. Money is siphoned off for a variety of things and the fund suffers. Bush hasn't fixed anything. Republicans have fought tooth and nail to prevent any program that helps poor, elderly people, or kids so why would Bush or any other Republican, for that matter, want to fix Social Security? They relish any failure it has.

Answer 5

It's not fixed, and it won't be for about another 8 or 10 years.

See, the reason that it's not getting fixed is because the majority of voters will not live long enough for this broken system to be a problem. That balance will tip around 2015-2017.

As long as the voters don't want change, the politicians won't want change.

Personally, I think we should fix it now, by raising the cap, raising the rate, and cutting benefits to today's recipients -- the ones who have ignored this problem for decades because it was only going to affect their children and grandchildren, but not them.

Answer 6

Bush tried to do something in 2005 and the Democrats (and some Republicans) in Congress blocked it.

If any private pension fund were run like Social Security, the trustees would all be in jail for life!

Yes, it's in trouble, still.

Answer 7

You people are stupid!! The President cannot spend money it is the role of the congress to spend money!! The president can only propose!!! So any spending is done by the congress!!!

Answer 8

MIKE IS RIGHT IT HAS BEEN STOLEN

What do you do when you want to screw only the working people of your nation with the largest tax increase in history and hand those trillions of dollars to your wealthy campaign contributors, yet not have anybody realize you've done it? If you're Ronald Reagan, you call in Alan Greenspan.
Through the "golden years of the American middle class" - the 1940s through 1982 - the top income tax rate for the hyper-rich had been between 90 and 70 percent. Ronald Reagan wanted to cut that rate dramatically, to help out his political patrons. He did this with a massive tax cut in the summer of 1981.
The only problem was that when Reagan took his meat axe to our tax code, he produced mind-boggling budget deficits. Voodoo economics didn't work out as planned, and even after borrowing so much money that this year we'll pay over $100 billion just in interest on the money Reagan borrowed to make the economy look good in the 1980s, Reagan couldn't come up with the revenues he needed to run the government.
Coincidentally, the actuaries at the Social Security Administration were beginning to get worried about the Baby Boomer generation, who would begin retiring in big numbers in fifty years or so. They were a "rabbit going through the python" bulge that would require a few trillion more dollars than Social Security could easily collect during the same 20 year or so period of their retirement. We needed, the actuaries said, to tax more heavily those very persons who would eventually retire, so instead of using current workers' money to pay for the Boomer's Social Security payments in 2020, the Boomers themselves would have pre-paid for their own retirement.
Reagan got Daniel Patrick Moynihan and Alan Greenspan together to form a commission on Social Security reform, along with a few other politicians and economists, and they recommend a near-doubling of the Social Security tax on the then-working Boomers. That tax created - for the first time in history - a giant savings account that Social Security could use to pay for the Boomers' retirement.
This was a huge change. Prior to this, Social Security had always paid for today's retirees with income from today's workers (it still is today). The Boomers were the first generation that would pay Social Security taxes both to fund current retirees and save up enough money to pay for their own retirement. And, after the Boomers were all retired and the savings account - called the "Social Security Trust Fund" - was all spent, the rabbit would have finished its journey through the python and Social Security could go back to a "pay as you go" taxing system.
Thus, within the period of a few short years, Reagan dramatically dropped the income tax on America's most wealthy by more than half, and roughly doubled the Social Security tax on people earning $30,000 or less. It was, simultaneously, the largest income tax cut in America's history (almost entirely for the very wealthy), and the most massive tax increase in the history of the nation (which entirely hit working-class people).
But Reagan still had a problem. His tax cuts for the wealthy - even when moderated by subsequent tax increases - weren't generating enough money to invest properly in America's infrastructure, schools, police and fire departments, and military. The country was facing bankruptcy.
No problem, suggested Greenspan. Just borrow the Boomer's savings account - the money in the Social Security Trust Fund - and, because you're borrowing "government money" to fund "government expenditures," you don't have to list it as part of the deficit. Much of the deficit will magically seem to disappear, and nobody will know what you did for another 50 years when the Boomers begin to retire 2015.
Reagan jumped at the opportunity. As did George H. W. Bush. As did Bill Clinton (although Al Gore argued strongly that Social Security funds should not be raided, but, instead, put in a "lock box"). And so did George W. Bush.
The result is that all that money - trillions of dollars - that has been taxed out of working Boomers (the ceiling has risen from the tax being on your first $30,000 of income to the first $90,000 today) has been borrowed and spent. What are left behind are a special form of IOUs - an unique form of Treasury debt instruments similar (but not identical) to those the government issues to borrow money from China today to fund George W. Bush's most recent tax cuts for billionaires (George Junior is still also "borrowing" from the Social Security Trust Fund).
Former Bush Junior Treasury Secretary Paul O'Neill recounts how Dick Cheney famously said, "Reagan proved deficits don't matter." Cheney was either ignorant or being disingenuous - it would be more accurate to say, "Reagan proved that deficits don't matter if you rip off the Social Security Trust Fund to pay for them, and don't report that borrowing from the Boomers as part of the deficit."

Answer 9

Bush tried to fix it a few years ago,
he was trying to let people take their ss benefits and put it in stocks,or other investments.
I think he lost the vote in Congress.
It is still broke,
We were told when this program started that it will be put in a lock box for our retirement. Well as you see it was put in the general fund and spent for all the governments pet projects to keep getting them elected.
Basically they stole all our money now we will have to pay more taxes,or take a cut in benifits in order to save it.
The dems won't tell you that cause they want to raise your taxes to fix it.
remember they stole it,we have to pay ourselves back.nice isn't it.


Mike...

Answer 10

The trouble with it is the fact that they keep dipping into SS to pay for their pet projects. SS would be sustainable but wont be because of their idiotic actions!