The Social Security program is funded by employees and their employers. The federal government does not contribute to the program, right? So why does the federal government feel they have the right to raid the fund? All the money sent to Ukraine and other unnecessary programs could have been used to pay back what they owe to Social Security. Signed: Disgruntled SeniorDear Disgruntled Senior: You are correct that the Social Security program is mainly funded by payroll taxes on employee earnings and by employers who match those employee contributions. FYI, some additional SS revenue is received from income tax on Social Security benefits, as well as from interest on the special issue government bonds held in the Social Security Trust Fund. But the assertion that the Federal Government used (raided) the Social Security Trust Fund for any other purpose is a myth. All Social Security revenue received since the program began in 1937 has been accounted for, and all excess funds are contained in a special Trust Fund in the form of interest-bearing government bonds, reserved to pay future benefits. FYI, the interest on those bonds contributed about $67 billion to the Trust Fund reserves in 2023.Social Security revenue, today, is not adequate to pay all benefit obligations, and the extra money needed to pay full SS benefits for everyone is obtained by redeeming Trust Fund reserves. Redemption of those Trust Fund bonds is how the federal government “pays back” the cash loaned to it by Social Security. The excess SS money received from contributions was loaned to the Federal Treasury by the SS Trust Funds, interest-bearing bonds were issued by the government in return for the cash received, and the bonds issued are redeemable as needed by Social Security to pay benefits. FYI, the average interest on the 2023 bonds in the Trust Funds was about 4.125%, whereas the average rate of return on all bonds held in reserve was about 2.387%. This transaction is the same as for any other investment vehicle, except the bonds in the Trust Funds are redeemable at any time without penalty. Said another way, all excess money ever received by Social Security is/was invested in special-issue government bonds, and resides in reserve to pay future benefits, as needed.“Paying back” the money represented by bonds held in the Trust Funds would not be a wise financial move because it would eliminate all future interest ...
