EARLIER THIS year, the president made good use of Social Security to help deflect the Republican tax cut. "Save Social Security first," was his motto. Now the Republicans are trying to use the giant program for the opposite purpose of limiting spending. They claim to be opposed to use of the Social Security surplus to cover other costs of government. Democrats, led by the president, not to be outdone as Social Security's protectors, have bought into the idea. That's one of the reasons congressional appropriators are having to indulge in so many gimmicks. Neither party wants to be accused of stealing the old-age funds.
But that's a phony description of the choice they face. It's not as if the Social Security program exists apart from the rest of government. Mythology suggesting otherwise is wrong. Social Security taxes flow like all others to the Treasury. When the program is in surplus, as is currently the case, the Treasury keeps the excess -- the amount not needed to pay that year's benefits -- and puts an IOU in the trust fund, which is little more than an accounting device. The question is what then happens to the extra money. Under current law, there are only two alternatives. It can be used to cover other governmental costs, as has happened in most recent years, or to pay down debt.
The Republicans, having happily acquiesced in its use for other purposes in the past, now say it should be used only for debt reduction. But that is only possible if other spending equals other revenues, and the Republicans no more than the Democrats are prepared to vote for the spending cuts and/or tax increases that would be required to achieve such a result in the fiscal year just ahead. That's why gimmickry now flourishes. They -- and the Democrats, too, though they have the luxury of not being in the majority -- seek to make it appear that they are not touching Social Security.
They try to make spending invisible -- by calling it emergency spending, in which case it is not supposed to count; or by delaying it, on paper, until fiscal year after next; or by advancing it into this fiscal year, which still has two weeks to run. Billions of dollars in emergency farm aid, which will not actually go to farmers until next year, are apparently to be "spent" this year simply through a decree that they be placed in an escrow account from which they will later be dispensed. Then the money will show up on this year's books, about which no one cares any more, and next year's will look that many billions more virtuous.
But the spending occurs, no matter how they account for it. And the more that is spent, without offsetting taxes, the less that is left to pay down debt. It's the right policy to use as much as possible of the surplus ahead to pay down debt. The government thereby saves against the day, not that far distant, when the baby boomers will begin to retire, costs will soar and it will have to borrow again. But before they can save, the parties have to meet the current costs of government. One way or another, they're going to be using surplus Social Security funds to do so again next year, call it what they will.