Sunday, March 23, 2025

Yes, They CAN take Your Social Security

While I hold out hope that this will never happen, especially since I started receiving benefits just this month, "they" can take your Social Security. Your protestations that you "paid into it" your whole working life are essentially irrelevant. 

"I paid into it" comments are usually made due to a lack of understanding of how Social Security works. I have written on this several times from multiple angles -- use the search function to find complete explanations -- but once money is deducted from your paycheck, it's no longer yours in any real sense. It was used to pay benefits to people who were retired while you were working. It's not set aside for you in an account with your name on it. What you receive in benefits upon retirement is calculated based on a formula that takes into account how much your earned over your lifetime. You may receive more or less than was deducted depending on how long you live. 

Since currently the total amount paid out each year in benefits exceeds what is collected through payroll deductions the surplus in the Social Security Trust Fund is being depleted. It will be depleted in around 10 years. At that time revenue from payroll taxes will only cover around 80% of benefits. But even setting aside the depletion of the Trust Fund surplus, the Trust Fund itself is not a pile of cash -- it's Treasury Bonds that are in effect government IOU's. So, dipping into the Trust Fund balance to pay the difference between benefits and revenue means cashing in some of those Treasury Bonds (or collection interest on them). This means that the a portion of Social Security benefits are in reality coming out of the general fund budget even if for accounting purposes the general fund is untouched. 

Is it really outside the realm of possibility that this administration, which has thus far shown no deference to the rule of law or to the needs of ordinary Americans, could unilaterally decide to stop paying interest or allowing redemption of Treasury bonds by the Social Security administration? This would limit benefits now to 80% of revenue from payroll taxes. What would prevent Trump and his minions from altering the formula for calculating benefits so that benefits are reduced across the board? Congress has so far been unwilling to restrain his dictatorial actions and it remains to be seen whether he will defer to the courts when all appeals are exhausted. 

It's a nightmare scenario, but is it really outside the realm of possibility?

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