Reagan's Social Security Assessment Not Entirely Accurate

By Wicker, Thomas | THE JOURNAL RECORD, May 18, 1985 | Go to article overview

Reagan's Social Security Assessment Not Entirely Accurate


Wicker, Thomas, THE JOURNAL RECORD


""Social Security is running a surplus. Social Security is not part of the deficit problem. It is totally financed by a payroll tax, totally dedicated to that one program. If Social Security spending were reduced, you could not take that money saved and use it to fund some other program.'' - President Reagan, Jan. 18, 1985.

NEW YORK - Despite this statement, the Senate has voted, and Reagan has accepted, a one-year abstention from cost-of-living increases for Social Security recipients.

This ""freeze,'' they claim, will reduce the federal budget deficit by $6 billion in fiscal 1986 and about $22 billion over three years.

So what's going on here?

The answer is that Reagan was both right and wrong in his news conference statement:

- Right that Social Security taxes are earmarked for Social Security benefits and cannot be spent for anything else.

- But wrong that Social Security is not part of the ""deficit problem'' - the particular ""deficit problem,'' that is, that the Senate was trying to solve.

The figure of $213 billion, for instance (said to be the impending 1986 deficit if nothing is done to reduce it) is for the unified federal budget.

It's not well understood that the unified budget, in use since the Johnson administration, comprises all earmarked as well as general tax revenues, plus all expenditures, whether covered by earmarked revenues or not.

That includes both Social Security income and outgo.

The former is, indeed, larger than the latter, producing a surplus. However, Social Security benefit payments still add to the spending total in the catch-all unified budget.

If those benefits are reduced by $6 billion in fiscal 1986, that spending total is reduced. Hence, the unified budget deficit also is reduced by $6 billion (assuming that other expenditures have not been increased).

It's true that the $6 billion cannot be spent for any other purpose. Instead, the Social Security trust fund surplus will be increased by that much; but the surplus is lent to the Treasury for general purposes, reducing the Treasury's need to borrow in the credit markets.

The Treasury repays the trust fund with specially issued securities paying market rates of interest. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Reagan's Social Security Assessment Not Entirely Accurate
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.