But perhaps a different ledger entry would achieve even more: Let us recognize that past excess payroll taxes relative to benefit outlays (past Trust Fund surpluses under the "off budget" perspective) have been spent on other government programs.
Those surplus revenues were supposed to be saved, but instead Congress spent every last dime of them and replaced the excess payroll tax revenue it looted from the Social Security Trust Fund with I.O.U.s written to itself.
Alternatively, unchanged benefit rules would require raising the Social Security tax rate, as already indicated, from today's 12.4%% to more than 19%.How the plan would workThe Social Security trust fund holds the present surplus of payroll-tax receipts over benefits in the form of government bonds, but this is a mere accounting convention: it does not affect the fundamental arithmetic.
The surplus comes from payroll taxes levied on employees and employers to pay for hospitalization, nursing home care and other health benefits under Medicare.
He then asks "if contributions are down, and benefits are not, where does the money come from?" The answer is simple: from payroll tax surpluses.
Personal accounts are affordable and, unlike the current system, would truly save today's payroll tax surpluses to pay benefits in the future.
A Democrat in a county that was for many years a Republican stronghold, Mr. Suozzi cited his turnaround of finances by cutting the payroll, recording surpluses, reducing borrowing and winning higher credit ratings.
The program's past payroll tax surpluses were, by law, invested in special issue Treasury securities, which can be redeemed to pay for benefits when revenues from dedicated taxes fall short of promised benefits.
Take the surplus away -- by reducing payroll taxes -- and the government would have to borrow this amount from somewhere else, but it doesn't change the total amount of borrowing the government has to do.
When the entitlements spend less than is brought in through payroll taxes, the "surplus" is simply used to reduce the overall budget deficit.
