The self-styled truth-teller PolitiFact rated as "Mostly False" this claim: Social Security has nothing to do with the deficit.
And as they have done before, PolitiFact has made a mockery of itself. Social Security is not causing the current budget deficit. In fact, it is formally completely separate from the budget.
Social Security is self-funded, relying on a payroll tax, levied on both employers and workers, that is deposited into the Social Security Trust Fund. Benefits are subsequently paid out of that same fund. For the past three decades, Social Security has actually taken in more than it has spent, deliberately generating surpluses in anticipation of the retirement of the baby boom generation. Those surpluses are invested in U.S. Treasury bonds by the Social Security Trust Fund.
The Social Security actuaries estimate the surpluses built up over the decades, along with the payroll tax revenue coming into Social Security, will be enough to pay 100% of Social Security benefits for decades to come without changing the program at all!
So the deficits in the Social Security program that PolitiFact mentions were expected and are paid from past surpluses. Not one penny comes from outside the trust fund's investments. Implying that Social Security is contributing to the deficit because the Social Security Trust Fund holds U.S. Treasury bonds makes as much sense as suggesting that a family that owns Treasury bonds is contributing to the deficit.
The allegation that Social Security is contributing to our budget deficit has been a familiar claim from those who have sought to end the program as we know it. Regrettably, to a certain extent it has become a widely held belief. In part, that is because media organizations, such as PolitiFact, have been more concerned about their image than they have been with checking the facts. Instead, PolitiFact has twisted facts to fit an alternate reality – a reality that serves the interests of those targeting Social Security and other critical safety net programs. Despite their efforts, PolitiFact’s political gymnastics have only contributed to its own worthlessness.
Predictably, those looking to cut Social Security benefits continue to play PolitiFact to their advantage effectively. For if the American people are told repeatedly that Social Security is a cause of our budget problems, they’ll be less likely to object when the program is gutted or even privatized, all justified in the name of cutting the deficit.
We certainly should take steps to strengthen Social Security, and extend its projected solvency to the traditional 75-year benchmark, and the sooner that is done, the smaller those steps can be. But since it is its own self-funded program, it should be handled, as it has been, separately from the rest of the budget, and out in the open as opposed to being part of any "grand bargain." And in keeping with its current treatment as being fully off-budget, the net savings realized from any changes to Social Security should be put back directly into the program, strengthening it for future generations. Under no circumstances should we slash this critical program because some continue to perpetuate the false claim it’s contributing to our budget deficit. It simply isn’t.