Where does Social Security get the money to pay benefits other than taxes?Published: November 2, 2023
Full question: From where does Social Security get the money to pay benefits (other than payroll taxes and income taxes on those very benefits)? I’ve heard 2 stories: one is there are OASI and DI Trust Funds that contain the $2 trillion balance in cash (and thus Soc Sec pulls its payroll/income tax shortfall from them, thus negating any need to borrow $ and thus not contributing to the Fed deficit; the other is that the Trust Funds contain no actual cash but $2 trillion of IOUs. The 2nd story then says when Soc Sec needs to pull money from the Trust Funds to pay benefits, they ask Treasury for it and Treasury has to borrow that money/issue bonds, which means deficit spending. If you’d rather not take the time to type out what would probably be a quite-lengthy reply, if you know of creditable, non-partisan online resources I could go to to better understand how this actually works, that’d be great. Thank you very much for your time and your expertise
This explains the exact details about the SSA trust funds.
I hope this helps answer your question.