Half-truths: There is a surplus. There isn't a surplus.   MORE... • Is Soc. Sec. going bankrupt? • How big is the shortfall? • Is there really a surplus? • Will seniors' benefits be cut? • Are benefits guaranteed? Here's what we know: Social Security has collected more than it has paid out for 20 years. The excess money has been loaned to the U.S. Treasury in exchange for special-issue Treasury bonds. Those who deride the notion of the "surplus" refer to such bonds as nothing more than pieces of paper in a drawer. Here are two of their complaints: 1) the money lent to the U.S. Treasury has already been spent on things other than Social Security; and 2) paying back the money means the government will have to borrow more money, raise taxes, cut spending elsewhere or reduce benefits. Those who argue the surplus is very real note that the special Treasury bonds are backed by the full faith and credit of the U.S. government. So unless the government defaults on its debt -- which it has never done and is not likely to do -- it will honor its obligations to Social Security when the system needs to redeem those bonds in order to continue paying benefits in full. (For more on the contentions about Social Security's surplus, click here.) next»

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