Comments on: Measuring the deficit http://cstpr.colorado.edu/prometheus/?p=4981 Wed, 29 Jul 2009 22:36:51 -0600 http://wordpress.org/?v=2.9.1 hourly 1 By: David Bruggeman http://cstpr.colorado.edu/prometheus/?p=4981&cpage=1#comment-12409 David Bruggeman Sun, 22 Feb 2009 00:40:15 +0000 http://sciencepolicy.colorado.edu/prometheus/?p=4981#comment-12409 I appreciate the explanation regarding Social Security payments. I was under the impression that the value of the Social Security trust fund offset the debt, or at least the deficit numbers. A little digging (that I should have done yesterday), notes that the actual treatment of federal trust funds in the budget is a bit more complicated. See this link (from the Social Security Administration's history section) to get a better explanation of how the trust funds have been treated as "on" or "off" budget over the years. http://www.ssa.gov/history/BudgetTreatment.html It appears that treating the funds as on budget (which is often done, even though they are currently off budget) increases both receipts and expenditures. However, the boost in receipts is greater than the boost in expenditures, making the deficit measurement smaller. I appreciate the explanation regarding Social Security payments. I was under the impression that the value of the Social Security trust fund offset the debt, or at least the deficit numbers.

A little digging (that I should have done yesterday), notes that the actual treatment of federal trust funds in the budget is a bit more complicated. See this link (from the Social Security Administration’s history section) to get a better explanation of how the trust funds have been treated as “on” or “off” budget over the years.

http://www.ssa.gov/history/BudgetTreatment.html

It appears that treating the funds as on budget (which is often done, even though they are currently off budget) increases both receipts and expenditures. However, the boost in receipts is greater than the boost in expenditures, making the deficit measurement smaller.

]]> By: Maurice Garoutte http://cstpr.colorado.edu/prometheus/?p=4981&cpage=1#comment-12405 Maurice Garoutte Sat, 21 Feb 2009 17:30:07 +0000 http://sciencepolicy.colorado.edu/prometheus/?p=4981#comment-12405 Future scheduled Social Security payments are not included in the national debt because they are not explicit debt. (http://www.ncpa.org/pub/st/st241/s241c.html). Note that the term is “scheduled payments” not “obligated payments”. The Supreme Court has ruled in the case of Fleming v. Nestor that the payments can be changed by Congress. (http://www.fasab.gov/pdffiles/052307mins.pdf) The social security fund is not liquid, the bonds require congressional approval to be converted to cash. Future scheduled Social Security payments are not included in the national debt because they are not explicit debt. (http://www.ncpa.org/pub/st/st241/s241c.html).

Note that the term is “scheduled payments” not “obligated payments”. The Supreme Court has ruled in the case of Fleming v. Nestor that the payments can be changed by Congress. (http://www.fasab.gov/pdffiles/052307mins.pdf)

The social security fund is not liquid, the bonds require congressional approval to be converted to cash.

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