The Senate and the House of Representatives are considering enforceable mechanisms to preserve the surplus generated by Social Security so that it could be used in the future to pay for reforms of both Social Security and Medicare. Pending those reforms, Social Security surpluses would be used to reduce the amount of federal debt held by the public. The measures are contained in the Republican leadership's budget resolutions for fiscal year 2000, and will be given force in separate legislation to be considered later this spring. The method under discussion also raises a number of questions, however, that need to be answered.
Surplus funds are an open invitation to raise spending.
It would end the practice of using Social Security surpluses to subsidize other spending. For over 15 years, surplus money collected by Social Security immediately has been spent to fund other federal programs. In return, Social Security has received special-issue treasury debt that can be cashed in to replace these funds sometime in the future. The lockbox would ensure that Social Security taxes are used either for Social Security or to reduce the amount of federal debt held by the public. It would provide a source of funds for Social Security reform.