05/20/2025
And the government, in their great wisdom, was to invest to increase the amount so Social Security would stay solvent but, as it stands, the government has borrowed from it for other projects. The U.S. government can and does borrow money from the Social Security Trust Funds. Here's how it works:
1. Social Security surpluses are invested in Treasury securities:
When Social Security collects more in payroll taxes than it pays out in benefits and administrative costs, the surplus is invested in U.S. Treasury securities.
These securities are special-issue, non-marketable bonds that are backed by the full faith and credit of the U.S. government.
2. Government uses the funds for other spending:
The Treasury uses the cash from these Social Security surpluses, like any other cash on hand, to finance the ongoing operations of the government, effectively borrowing from the trust funds.
3. Trust funds are "repaid" when needed:
When Social Security needs to redeem these securities to pay benefits, the Treasury either raises taxes, borrows from the public (increasing the national debt), or uses other government funds to "repay" the trust funds.
In essence, the government borrows from the Social Security Trust Funds by using the surpluses to finance current spending and then essentially "repays" the trust funds when Social Security needs the money to cover benefit obligations.
If the trust fund is broke it's because the government has not done it's job in maintaining it.