Reply #34: "Its your money"? Nope. [View All]

[Igel]

It's the SSA's money at that point, and the deal is that you pay not so much for your retirement as for the SS funds being paid out to current recipients.
Even with the "trust fund" money this is the case. You pay for current recipients, and our kids will pay for us when we're recipients.

That said, it's an entitlement. It's money that we've been deemed entitled to receive by law. It's independent, largely, of the amount you pay in (although there's a correlation between income and your monthly allocation, there's no necessary correlation between your earned pre-retirement income and the amount you collect post-retirement). If you die without a dependent, it's not like it's money owed to you.

The money comes from a tax duly enacted by Congress, but one that's been earmarked by Congress for a specific purpose. Same with Medicare--there's a special tax for that purpose--not that the tax fully covers Medicare, IIRC. In fact, if you wanted to be snarky in your accounting you could say that Medicare's eaten part of the trust fund. Let's not be snarky.

*That* said, it's not a compact with our government any more than the gasoline tax or any other tax is a compact--or any specific law, for that matter. It's just a tax, one that attaches a label to the funds as they enter the Treasury bank account. The Congress can dispose of what makes it special by a majority vote stripping off the label, stripping off the earmarking.

The Congress decided that in the event of excess funds there was a special kind of bond that Congress could issue to the SS fund, the only thing that the SSA can do with the money other than use it for expenses and recipients. If Congress wanted to default to the SSA on that type of bond, it wouldn't affect any other kind of bond, and wouldn't affect any other bond holder (since there are no others); if Congress wanted to pay it all off and then immediately merge the trust fund with general revenues, it could do that ... a de facto default.

There's no code of law preventing Congress from revoking SS or the FICA. They created it, they can revoke it. They don't out of political reasons, not because of any great moral claim, not because there's some statute imposed on Congress and the US by a supranational entity that would come in and spank Congress if they did so. They may claim morality, but that's squishy--at some point politics is likely to trump that particular bit of morality, and there'll be a new "new morality" trumpeted.