The “debate” over the Social Security’s (SS) “crisis” is a cover for a trillion-dollar looting of the SS Trust Fund, pulled off for over 52 years by every Democratic and Republican president who has occupied the White House — Johnson, Carter, Clinton, Obama, Nixon, Reagan, the two Bushes, and now Trump. It’s a crisis, not of SS but one of U.S. capitalism, mired in a multi-trillion debt resulting from illegally spending the workers’ SS surpluses to finance U.S. imperialism’s wars against Vietnam, Grenada, Panama, El Salvador, Nicaragua, Somalia, Yugoslavia, Iraq and Afghanistan. It mirrors a general law of the profit system: shift the bosses’ financial burdens onto the backs of the working class.
Back in 1968, when the U.S. invasion of Vietnam was in high gear, the Johnson administration’s war expenditures were spinning the Federal budget into bottomless debt. Since the SS Trust Fund was running a surplus — its income from payroll taxes deducted from workers’ paychecks was exceeding the pensions paid out to retirees — the Johnson gang used a shrewd maneuver to “balance the budget”: “fold” this SS surplus into a newly labeled “Unified Federal Budget.” This violated the bosses’ law banning use of SS Trust Fund money for purposes other than SS.
By this sleight-of-hand, Johnson could announce a federal government “surplus,” masking the deficit in federal spending generated by the enormous expenses of the Vietnam War. To avoid the appearance of stealing the SS Trust Fund’s surplus, the government gave the SS Trust Fund U.S. Treasury notes equal to it’s “loan” from the Fund, promising to pay back the loan with interest. This meant that the SS surpluses — now part of this Unified Federal Budget — could be used to pay for all federal government costs, “for everything from jet fighters to thumb tacks” (NY Times, 1/21/90), especially for the proliferating “forever” wars. These wars resulted in mounting federal deficits, laying the basis for an enormous debt to pay back the trillions “loaned” from the SS Fund: “Over the second and third decades of the 21st century, Congress will have to appropriate a total of $5 trillion for Social Security,” NY Times, 1/31/95), a crisis indeed, composed of SS surpluses paid into the SS Fund by — and stolen from — the working class.
This U.S. bosses’ deficit crisis is part of the general crisis of capitalism. They will always try to solve that crisis on the backs of workers, who produce all the value in society. Such “solutions” will continue until the working class, led by its revolutionary communist Progressive Labor Party, rises up to destroy the ruling class’s state power and establishes a society in which retired workers will be provided for by the social value produced by our entire class. Bosses, profits and imperialist wars will be buried forever.
In the 1980s, the Reagan gang executed a neat maneuver to shift still more of the tax burden onto the working class. It raised the payroll taxes into Social Security 23 percent while lowering the top income tax rate benefiting the rich from 70 percent down to 28 percent, and lowering corporate income taxes by 23 percent. Presumably workers and bosses each pay 7.65 percent of their payrolls into the Social Security Trust Fund. However, the bosses’ share comes out of their profit from the workers’ labors, so actually workers are really saddled with the entire 15.3 percent. The combination of these increases on workers and decreases on the bosses meant, “The burden of taxation was shifted from the income tax to the Social Security tax….[so 75 percent] of all Americans now pay more in Social Security taxes than they do in income taxes….[Therefore] the expenses of government are financed more by a tax on the poor and the middle class and less by a tax on the wealthy” (NY Times, 1/21/90). Thus, the Social Security surpluses stolen by the bosses in the Unified Federal Budget [see main article] wreaked still further havoc on the working class.