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["Don Bowen" <don.bowen AT earthlink.net>]

> In the 70's SS was headed for insovency and that was thwarted by a massive
> increase in the SS tax.  So massive an increase that it created a surplus.
> The US govenment can't hold onto the money in the form of savings (it is
> illegal) so instead they loaned the money to the general revenue.  This 
> created massive amounts of obligation based on the SS taxes that were > >
> being collected. And now those obligations are becoming due.

It was in the late 80s that a commission headed by Greenspan recommended a
huge payroll tax increase.  Congress passed the necessary enabling
legislation and I believe it was Bush I who signed it into law.  Part of the
enabling law defined the bonds that the US government issued to the SSI
trust fund as "special."  These special bonds were not reported as the
annual deficient.  Bush & Co when they report the deficient do not report
the unified deficient which includes the SSI bonds.  It does show up on the
national debt and SSI now makes up almost half of that.

You can see why conservatives want so much to kill what they call the last
of the Roosevelt socialism.  If they do not kill it in the next ten years or
so there will be massive tax hikes needed to start buying back those bonds.
Removing the cap on SSI earnings will help put off that day some.  In the
end the conservatives will have a fight and it may well become a battle with
the lines drawn along the current SSI recipients and the wage earners. They
lost the best chance now that us baby boomers are starting to draw on the
system.

Don Bowen  KI6DIU
http://www.braingarage.com/Dons/Travels/journal/Journal.html