Congress Did Not “steal” From Social Security

 by Rod Williams, Sept. 4, 2026 -  It is so frustrating to see the same memes or read comments about Security that are simply false. They pop up in my Facebook feed again and again. In talking to people, I hear them repeat lies about what is wrong with Social Security.

People will say that if we would cut out the waste, fraud, and abuse, the problem with Social Securityy would be solved. No doubt there is someone somewhere who is getting Social Security who is not entitled to it. But cutting out waste, fraud, and abuse would not solve Social Security's problem. The waste, fraud, and abuse is insignificant. I am for catching as many cheaters as we can find, but that is not what is wrong with Social Security.

Sometimes people get more specific and say what is wrong with Social Security is all of the illegal immigrants getting Social Security. Illegal immigrants in the United States are ineligible to receive Social Security retirement, disability, or survivor benefits. There are a handful of non-citizens, such as green card holders, who do qualify for Social Security, but they are also paying into the system. Their participation in Social Security is no more of a drain on the system than anyone else. Illegal immigrants who are working and using a fake Social Security card actually help the system. They pay in and never receive Social Security benefits.

One of the biggest lies about Social Security is that the reason it is going broke is that the government borrowed from Social Security and left the trust fund with worthless IOU's, or simple claims that Congress stole from Social Security. Absolutely untrue.

When Social Security collects more in payroll taxes than it pays out in benefits, the excess is invested in Treasury bonds issued specifically for the trust fund. The cash from these bond purchases flows into the Treasury’s general fund, which can be used for any federal purpose. 

What do people think happens to money that is in the Trust Fund? Do they think it just sits untouched in a vault or is under someone's mattress?  We should be glad that it is drawing a little bit of interest. That is the way the system works.  In fact, it is a legal requirement, and it’s the same thing that happens when any investor buys U.S. government bonds.  When the trust fund redeems its bonds, the Treasury pays the principal and interest from general revenues. Because these bonds are backed by the full faith and credit of the U.S. government, the bonds are legally obligated to be honored. People take what is rational and legally required and somehow turn it into the claim that the government stole from Social Security.  Congress does not “steal” from Social Security. Surplus revenues are legally invested in Treasury bonds earning interest.

What is wrong with Social Security is demographics. People are living longer, and because people are having fewer children, there are fewer people paying into the system. Social Security is a transfer program. When you pay Social Security taxes, that money does not go into an account with your name on it. When you pay your Social Security taxes, it goes right out the door to pay someone else's current benefit. It has always been that way. Any excess of what is received over what is paid out goes into the Trust Fund, but most of the benefits one receives is money that someone else is paying in.

Social Security is in trouble, with the trust fund projected to be depleted by late 2032. When it is depleted, benefits will be cut by about 22%. I suspect Congress will not allow that to happen and will pay the Social Security deficit out of the General Fund, which means borrowing with Treasury bonds sold on the open market or by borrowing from the Federal Reserve. Issuing more debt will hasten the day of reckoning for running up massive debt. Borrowing from the Federal Reserve is "printing money," is inflationary, and reduces the purchasing power of the dollar.

Some things could be done to put Social Security on a sounder footing. I have explored these elsewhere in posts on this blog. All solutions have consequences and a downside. Solutions should be explored and debated. Unfortunately, any talk of reform is met with images of pushing grandma in a wheelchair over a cliff. 

What does not help address the future of Social Security is repeatedly telling people that the reason there is a problem is that Congress stole the money. 

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