OnTheIssues Fact Checking: on Social Security

Lyndon Johnson: FactCheck: Moved Trust Fund to "on-budget," not spendable

A: 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. This question comes from a confusion about the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-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.