Both CBO and OMB project an inability of current services unified budget
surpluses to be applied wholly to repay debt by the middle of this decade.
The emerging key fiscal policy need is to address the implications of maintaining
surpluses beyond the point at which publicly held debt is effectively eliminated.
Once the link between payroll taxes and social security benefits is broken, the pressure to reform the social security system may ease, particularly in this environment of budget
surpluses.
While the Administration's rationale for these transfers is to ensure that the
surpluses actually materialize, the transfer of general revenues represents a major shift from past practice, under which social security has been financed almost entirely from dedicated payroll taxes.
Indeed, especially in light of these inexorable demographic trends, I have always emphasized that we should be aiming for budgetary
surpluses and using the proceeds to retire outstanding federal debt.
Under the Republican plan, with money collected from Social Security
surpluses, the government would pay down approximately $2.
Speaker Dennis Hastert said last week that he expected to use promptly any non-Social Security
surpluses that become available.
Republicans say they are ready to join Clinton in reserving 62 percent of looming
surpluses for Social Security, but they want to give the rest back in tax cuts.
The lawmakers singled out the LEOFF 1 fund surplus, although the State of Washington Department of Retirement Systems administers a dozen plans, most holding
surpluses.
has announced that the first House bill, HR 1, to be introduced in the upcoming 106th Congress will force the federal government to stop including the Social Security Trust Fund in calculating budget deficits or
surpluses.
Large
surpluses have been achieved as actual revenues have far exceeded forecasts.
Clinton is willing to spend
surpluses on his priorities, but has no intention of letting the taxpayer fund his priorities.
