Yes. The Federal Government currently owes the Social Security Trust Fund $2.85 Trillion Dollars. That’s $2,850,000,000,000.
While the Federal Government has borrowed from the Social Security Trust Fund since it began, in 1983, President Ronald Reagan (a Republican) and Speaker of the House Tip O’Neill (a Democrat) came to an agreement to increase Payroll taxes allowing the Social Security Trust Fund to build a large surplus so they would have the funds to help pay the Social Security obligations to baby boomers when they retired.
Sadly, politicians in Washington couldn’t keep their hands off the money in the Social Security Trust Fund. While both parties have been quick to blame the other one for the raid of the Social Security Trust Fund, both parties have been equally to blame. Every year, the total balance in the Social Security Trust Fund has been transferred to the Federal Treasury and replaced with non negotiable bonds which are stored in a filing cabinet at the Bureau of Public Debt in Parkersburg, West Virginia. The interest on these bonds is “paid” by the issue of even more bonds.
The Federal Government will only have money to repay its obligations by raising taxes or radically cutting spending. In the words of Senator Mike Enzi “If the revenues are not there (and they will not be as long as the government continues to run budget deficits), then the federal government will have to raise taxes or cut other spending to finance promised Social Security benefits. This is gross financial mismanagement. We don’t have enough trust funds with money in them to satisfy the demands put on our government.”