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Tom Kertscher
By Tom Kertscher January 29, 2020

Two-pronged attack on Democrats over Social Security wrong on both counts

A lengthy meme that regularly makes the rounds on Facebook attacks Democrats on Social Security. 

We’re focusing here on two of the claims in the question-and-answer formatted post, which has been shared more than 450,000 times. 

The Democratic Party "took Social Security from the independent ‘Trust Fund’ and put it into the general fund so that Congress could spend it," the post claims, and "eliminated the income tax deduction for Social Security (FICA) withholding."

The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

It’s wrong on both counts.

The Social Security challenge

Social Security was signed into law by Democratic President Franklin Roosevelt in 1935 to, according to the law’s preamble, "provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws." Now a $1 trillion-a-year program, it helps more than 63 million retirees and the disabled, plus their families, pay the bills. 

The federal government faces a major challenge: Social Security’s $2.9 trillion in its combined trust funds, or reserves, will run out by about 2035. The program will continue to pay benefits, but without additional taxpayer dollars, it could only afford to pay between 70% and 80% of the benefits people expect.

Social Security is often the object of inaccurate statements that stir fear or anger. We previously rated as False a claim on Facebook that Congress rejected a $336-per-month increase in Social Security and disability benefits but approved an $8,872-per-month pay increase for itself.

As for the post we’re checking now, the Social Security Administration includes both parts of the claim in a "Debunking Some Internet Myths" section of its website.

No trust fund to general fund

The first part alleges the Democratic Party "took Social Security from the independent ‘Trust Fund’ and put it into the general fund so that Congress could spend it."

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The Social Security Administration says:

"There has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government. … From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been ‘put into the general fund of the government.’

"Most likely this question comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969, the transactions to the Trust Fund were included in what is known as the ‘unified budget.’ This means that every function of the federal government is included in a single budget. ...This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken ‘off-budget.’ This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are ‘on-budget’ or ‘off-budget’ is primarily a question of accounting practices — it has no effect on the actual operations of the Trust Fund itself."

While the Social Security trust fund balances weren't affected by the accounting change, "what economists and other policy analysts were concerned with is whether combining Social Security's surpluses with the on-budget's deficits encouraged policymakers to run larger deficits in the non-Social Security part of the budget," said American Enterprise Institute scholar Andrew Biggs, a former deputy commissioner with the Social Security Administration.

"For example, let's imagine that the public demanded that budget deficits be no more than, say, $100 billion per year. If they exceeded that amount, voters would consider Congress to be fiscally irresponsible and punish them at the next election. But if Social Security were running a $100 billion surplus, then Congress could run a $200 billion deficit in the rest of the budget while still reporting only a $100 billion unified budget deficit," Biggs told us.

"Most research has concluded that this is pretty much what happened: surpluses in Social Security encouraged Congress to run larger deficits in the rest of the budget, either by taxing less or spending more."

No tax deduction

The second part of the claim is that the Democratic Party  "eliminated the income tax deduction for Social Security (FICA) withholding." This too is inaccurate.

"There was never any provision of law making the Social Security taxes paid by employees deductible for income tax purposes. In fact, the 1935 law expressly forbid this idea," the Social Security administration says. 

Our ruling

A frequently circulated Facebook post says the Democratic Party "took Social Security from the independent ‘Trust Fund’ and put it into the general fund so that Congress could spend it" and "eliminated the income tax deduction for Social Security (FICA) withholding."

Both parts of the claim are so common that the Social Security Administration rebuts them on its website.

The Social Security Trust Fund has never been put into the general fund of the government and there was never any tax deduction.

We rate the statement False.

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Two-pronged attack on Democrats over Social Security wrong on both counts

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