The Social Security trust fund has been required to be invested in US Government Bonds since the Social Security Act first passed in 1935. That its the only sense in which the government has ever "borrowed on it," and it isn't different from any other investor holding US Gov't bonds.
The government isn't robbing Peter to pay Paul: they're managing the Trust Fund in accordance to the exact same law they've been using the whole time.
What hasn't happened since 1990 is that we haven't raise the FICA tax rate. We used to do it regularly. A couple time a decade or so.
There's a decent argument that limiting to government Bonds is too conservative an approach. There's also a good counterargument that you want a social safety net program to invest as safely as possible. And a good argument that we don't want the US government taking that big of a direct stake in something like the stock market.
But whichever side you come down on for that, the current solvency concerns aren't a result the government misappropriating or mismanaging the trust fund. They're a result of Congress not acting despite significant demographic changes.
People are living longer into retirement and thus collecting benefits for longer (61 years in 1935 vs 81 years today). They are also choosing fewer children, which means fewer working age individuals paying in per retiree (avg fertility rate of 3 in 1935 vs 1.7 in 2026).
This is hardly an unsolvable problem: we just need to increase collections. My preferred method would be to remove the income cap. We could also just raise the income cap - and index it to inflation. We could also simply increase the withholding rate. As noted above, we used to do that on the regular.
All of those are politically unpopular: no-one likes the tax man.
Short of just cutting benefits for current retirees, the decision has been delayed too long for the other options to work in time.
Increasing the retirement age or moving the trust fund into the market would have almost certainly done the trick (with their own trade-offs). But we would have needed to implement it about a decade ago.
As to why we don't just decrease benefits: there's both a principled reason and a practical one.
On the principled side: social security isn't there to provide any individual gets their worth from it. It's there because, without a similar system, extreme poverty among the elderly is a major social and economic problem.
On the practical side: retires vote, and do so reliably. And since we're far enough along that cutting benefits would have to include current retires, that means Congress is going to find that even less politically viable than doing nothinh.
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u/SeaAshFenix 4d ago edited 4d ago
Inaccurate.
The Social Security trust fund has been required to be invested in US Government Bonds since the Social Security Act first passed in 1935. That its the only sense in which the government has ever "borrowed on it," and it isn't different from any other investor holding US Gov't bonds.
The government isn't robbing Peter to pay Paul: they're managing the Trust Fund in accordance to the exact same law they've been using the whole time.
What hasn't happened since 1990 is that we haven't raise the FICA tax rate. We used to do it regularly. A couple time a decade or so.
There's a decent argument that limiting to government Bonds is too conservative an approach. There's also a good counterargument that you want a social safety net program to invest as safely as possible. And a good argument that we don't want the US government taking that big of a direct stake in something like the stock market.
But whichever side you come down on for that, the current solvency concerns aren't a result the government misappropriating or mismanaging the trust fund. They're a result of Congress not acting despite significant demographic changes.
People are living longer into retirement and thus collecting benefits for longer (61 years in 1935 vs 81 years today). They are also choosing fewer children, which means fewer working age individuals paying in per retiree (avg fertility rate of 3 in 1935 vs 1.7 in 2026).
This is hardly an unsolvable problem: we just need to increase collections. My preferred method would be to remove the income cap. We could also just raise the income cap - and index it to inflation. We could also simply increase the withholding rate. As noted above, we used to do that on the regular.
All of those are politically unpopular: no-one likes the tax man.