Understanding Social Security: A History of Borrowing, Obligations, and Potential Outcomes
As of 2025, the U.S. government owes approximately $2.8 trillion to the Social Security Trust Fund for borrowing it has done over decades.
From the Publisher: The current state and future of Social Security are hotly debated and often misunderstood topics among Americans today. The information below is shared to provide readers with a better understanding of the program’s history, workings, and potential future.
- Christian Hendricks, Publisher (March 26, 2025)
The Birth of Social Security and the Creation of the Trust Fund
In 1935, amidst the Great Depression, President Franklin D. Roosevelt signed the Social Security Act, creating a safety net for retired workers. The program was designed as a pay-as-you-go system, meaning that payroll taxes collected from current workers would fund benefits for retirees.
As of 2025, the Social Security payroll tax is 6.2% of wages for employees, with employers contributing an additional 6.2%, for a total combined rate of 12.4%. This tax applies to income up to the Social Security wage base limit of $168,600. Earnings above that amount are not subject to Social Security payroll taxes.
By the early 1980s, however, Social Security's financial stability was in jeopardy. The Greenspan Commission, a bipartisan group convened under President Ronald Reagan, recommended significant reforms. The solution was to increase payroll taxes and accumulate a surplus in a newly formalized Social Security Trust Fund, ensuring the program’s solvency for future generations.
The U.S. Government Begins Borrowing from Social Security
With the establishment of the Trust Fund, Social Security began running surpluses. By law, these surpluses could not sit idle but had to be invested in special-issue U.S. Treasury securities—essentially IOUs from the federal government. This allowed the government to borrow from Social Security to finance other programs and operations, just as it does from the public by issuing Treasury bonds.
Over time, this borrowing ballooned. As of 2025, the U.S. government owes approximately $2.8 trillion to the Trust Fund, representing decades of accumulated surplus funds used for everything from military spending to infrastructure and general government expenses. The expectation has always been that the government would repay this debt when needed to fund Social Security benefits.
The Strength of the Government’s Obligation to Repay
The obligation to repay Social Security’s trust fund is backed by U.S. law and the 14th Amendment, affirming that the United States's public debt “shall not be questioned.” Since the securities held by the Trust Fund are legal obligations of the Treasury, failing to redeem them would be akin to defaulting on any other form of government debt.
The government has historically prioritized Social Security payments, even during financial crises and debt ceiling showdowns. Given their broad public support and the program's role in keeping millions of retirees out of poverty, Social Security benefits are politically untouchable for many lawmakers.
What Would Happen If the U.S. Government Eliminated Social Security?
Despite the legal obligation, some have speculated that the government might attempt to reduce or eliminate Social Security to avoid repaying the Trust Fund. While theoretically possible, this scenario would be politically, economically, and legally catastrophic:
Legal Challenges
Social Security benefits are considered a contractual obligation under the Social Security Act of 1935.
If the government attempted to eliminate the program, lawsuits would likely follow, possibly reaching the Supreme Court.
The courts might rule that the government must still honor existing obligations, preventing a total repeal.
Political Backlash
Social Security is immensely popular across party lines. Eliminating it would be political suicide, especially given that older Americans—those most reliant on benefits—are among the most active voters.
Any political movement advocating for eliminating Social Security would likely face overwhelming resistance from Congress and the public.
Economic and Social Consequences
Millions of retirees who depend on Social Security would face financial ruin.
The government’s failure to redeem Trust Fund securities could destabilize financial markets, eroding trust in U.S. Treasury bonds and raising the country's borrowing costs.
Social safety net programs would be overwhelmed as millions of seniors, disabled individuals, and widows sought alternative sources of support.
Alternative Solutions Exist
Instead of eliminating Social Security, Congress could implement reforms such as:
Raising the payroll tax cap so that higher-income earners contribute more.
Gradually increasing the retirement age.
Adjusting benefits to ensure long-term solvency.
The Future of Social Security
With projections indicating that the Trust Fund will be depleted by 2033, the conversation about Social Security’s future is critical. However, rather than eliminating the program, the most likely outcome is a set of reforms that maintain benefits while adjusting funding mechanisms to sustain Social Security for future generations.
The U.S. government’s borrowing from the Social Security Trust Fund has helped finance decades of federal spending, but repayment is not a choice—it is an obligation. Any attempt to renege on that debt would trigger legal battles, political upheaval, and economic instability. The road ahead will require thoughtful policymaking, but one thing remains clear: Social Security is deeply embedded in the fabric of American life, and its survival is a national priority.
For More Information
To learn more about Social Security, including benefit estimates and the program’s financial outlook, visit the Social Security Administration’s official website at www.ssa.gov. The site offers tools to help you plan for retirement, understand payroll taxes, and stay informed about proposed reforms.
If you have questions or concerns about the future of Social Security and wish to share your views, consider reaching out to your elected representatives. Holly Springs, NC, is represented by:
U.S. Senator Thom Tillis
Website: www.tillis.senate.gov
Email: Email Senator TillisU.S. Senator Ted Budd
Website: www.budd.senate.gov
Email: Email Senator BuddU.S. Representative Valerie Foushee (4th Congressional District)
Website: www.foushee.house.gov
Email: Email Representative Foushee
A love of money evil is sabotaging Social Security and soon to attack the USPS! So they can come to the rescue flying the banner of “Privatization” to steal from the SS Trust fund & the Postal Retirement System!