By Nancy Altman
Founding Director, Social Security Works
Of all the FY 2017 proposed budgets, the Congressional Progressive Caucus' People's Budget is by far the best on Social Security. It deserves the support of everyone who supports Social Security.
What makes the CPC budget so strong is what it doesn't do: It does not include Social Security. Finally, a budget that follows the law!
Pub. L.101-508, title XIII, Sec.13301(a), Nov. 5,1990,104 Stat.1388-623, unambiguously states that Social Security "shall NOT be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of - (1) the budget of the United States Government as submitted by the President, [or] (2) the congressional budget." (Emphasis added.)
The reason for the law is clear. Private employers who sponsor pension plans are legally required to keep plan income and assets segregated from the company's general operating fund. Under the same principle, the law requires that Social Security's income and assets be kept segregated from the general operating fund of its plan sponsor, the federal government.
Too many Americans believe that their Social Security contributions have been stolen by their government, diverted to some unauthorized purpose. All the proposed budgets but the CPC's inadvertently reinforce the false impression that the people's pension monies - the Social Security trust funds -- are not being properly managed. The other budgets treat the funds as commingled in a so-called unified budget -- despite the clear requirements of the law to do the contrary. In contrast, the CPC budget makes it perfectly clear that Social Security's funds are held in trust, separate and apart from the general fund.
The CPC Budget complies with Pub. L. 101-508 by excluding Social Security. It announces its policy recommendations, but makes clear that those should be considered separately:
The People's Budget supports increasing Social Security's modest benefits, separate and apart from budget discussions. Social Security is part of the solution to a looming retirement income crisis, the disappearing middle class, and growing income inequality. It is the most secure, universal, fair and efficient insurance against the loss of wages in the event of disability, death, or old age, but its vitally important benefits are modest by virtually any measure.
Recognizing Social Security for the solution that it is while making clear that its funds are dedicated exclusively to the sole purpose of funding earned benefits (and the associated administrative costs) should not be the rarity that it is. The Congressional Progressive Caucus is to be applauded for seeing this when no other policymakers do. The CPC deserves our gratitude. Its budget deserves our support.