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Social Security Facts: Doesn’t Add to the Debt; Is a Bigger Creditor than China
WASHINGTON - December 12 - As many continue to call for cuts to Social Security around the so-called “fiscal cliff” talks, a leading analyst on Social Security is available for comment.
NANCY ALTMAN [email]
Co-director of Social Security Works, Altman said today: “There is much confusion about Social Security’s relationship to the federal debt of the United States. The issue is not one of opinion or point of view, but fact. The debt of the United States is subject to a statutory limit, which must be raised from time to time in order for the government to issue additional bonds, which in turn is necessary to ensure that the government can continue to function and does not come to a grinding halt. The fact is that cutting Social Security’s benefits does not create any additional room under the debt limit; it does not change by a single day how soon the nation hits that limit. This is counterintuitive and different from cuts to military, agriculture or other federal spending. But it is hard, cold fact. Social Security has no borrowing authority. It is a creditor, not a debtor. The United States has a total debt of around $16 trillion, $2.7 trillion of which is owed to Social Security, that is, to the workers of this nation and their families.”
Background: China is commonly referred to as “the largest lender to the United States” as in this layout by the New York Times “Who Is Owed by the United States.” But China holds about $1.2 trillion of U.S. debt — less than half that of Social Security.