You are essentially correct. Treasury has issued special T-Bills to the SSA because FICA tax revenue exceeded benefits paid until recently. This is often referred to as the Trust Fund and currently has a value of about $2.8T. SSA began cashing in those T-Bills around 2021, when benefits paid exceeded FICA tax revenue. The Trust Fund will be exhausted around 2033 and benefits will decrease by about 23% as that is the level that can be supported by only incoming FICA taxes. Any suggestion that Treasury isn't going to pay back the Trust Fund is incorrect. Another way to look at the situation is that Treasury has permission to go out on the global markets and borrow $2.8T to provide funds to the SSA as they draw down the Trust Fund. This is obviously a less than ideal situation.
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Originally Posted by Normal
The money was borrowed, but never actually returned. It started in 1965 to help pay for the Vietnamese war. It’s kind of like your kids borrowing money, in most cases don’t expect it back. Currently the US government owes almost 3 trillion to the fund.
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