U.S. Senate Republican Policy Committee - Larry E. Craig, Chairman - Jade West, Staff Director
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February 3, 1999
Clinton's Social Security Scam Draws Well-Deserved Criticism
Double-Counting for Dummies

President Clinton's disingenuous device -- to extend artificially the solvency of the Social Security trust fund by spending money he doesn't have -- is understandably drawing criticism. This criticism doesn't surprise anyone . . . except the Administration. In a word, the Administration's proposal is nothing more than double-counting. However, again not surprisingly, the Administration takes great umbrage at this word, despite its accuracy. Evidently, the White House doesn't understand what double-counting means. We will try to walk them through their own proposal.

Clinton 15-year Budget Balance Sheet
Total Budget Surplus $4.5 trillion
Social Security Surplus $2.3 trillion
Non-Social Security Surplus $2.2 trillion
minus
Clinton's Big-Spending Proposals $1.7 trillion
(Medicare: $700 billion,
USA accounts: $500 billion,
Government spending: $500 billion)
Remaining Surplus $0.5 trillion
minus
Clinton's Social Security Payment $2.8 trillion
($2.1 trillion to trust fund and
$0.7 trillion in government investment)
Final Balance -$2.3 trillion

The Surplus

The good news is that the President is projecting a $4.5 trillion surplus over the next fifteen years. As good as that news is, it is only half as good as it sounds because half of that surplus -- $2.3 trillion -- is Social Security's surplus. It is therefore Social Security's money -- as everyone but the President seems to agree.

Thus, there is really only a "working surplus" of $2.2 trillion that is available for use.

President Clinton's Social Security Proposal

President Clinton has proposed using $2.8 trillion (which doesn't include the substantial interest which will be further credited to this sum) of the budget for Social Security -- $2.1 trillion of this money would go into the Social Security trust fund and $0.7 trillion would be invested by the government in the private sector equity markets. According to his claims, the President's proposal would extend by 23 years the life of the Social Security trust fund from its current estimated bankruptcy date of 2032 to 2055. At the same time Clinton promises solvency, the Social Security trustees project that the Social Security trust fund will have a $61.1 trillion negative balance. What Clinton is of course not saying is that even under his proposal, the key date when Social Security will begin running a deficit and will be unable to pay full benefits remains the currently projected 2013 -- it does not extend by a single day the real reform deadline.

Aside from the problems of government investing in the private sector, the even larger problem is how does President Clinton get $2.8 trillion when he only has $2.2 trillion left with which to work?

The Surplus and the President's Budget

Getting the promised $2.8 trillion for Social Security from a $2.2 trillion surplus would be no mean trick in itself; however, that is not the only spending the President wants. Just counting the President's big-ticket proposals -- $700 billion for the Medicare trust fund, $500 billion for USA retirement accounts, and $500 billion in new domestic and defense spending -- the White House wants another $1.7 trillion to come out of their overdrawn surplus.

Notwithstanding having already overdrawn the working surplus by $0.6 billion for his Social Security payment, how does the President propose to get yet another $1.7 trillion?

Questions for the President

The White House may not understand double-counting but the American people do. What no one can understand, however, is how does the President do all he has promised without double-counting?

  • How does President Clinton put $2.8 trillion into Social Security when he doesn't have $2.8 trillion with which to begin?

  • How does President Clinton spend $2.3 billion more than he has?

  • Even assuming the above impossibilities, how does Clinton use $2.8 trillion he doesn't have to fill what the Social Security trustees report will be a $61.1 trillion deficit in 2055?

These are questions the country and Congress should be asking -- the answers should be very illuminating, if not downright miraculous.

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