[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[House]
[Page 6020]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    UNDERSTANDING THE BUDGET SURPLUS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Maryland (Mr. Bartlett) is recognized for 5 minutes.
  Mr. BARTLETT. Mr. Speaker, during the Clinton years, Washington was 
telling the American people that we had a budget surplus and that we 
were paying down the debt. After a number of months of bragging about 
this budget surplus we had and about how much we were paying down the 
debt, we had to raise the debt limit ceiling.
  Now, I asked our leadership, Isn't it going to be a little difficult 
to explain to the American people why we have to raise the debt limit 
ceiling if for these many months we have been paying down the debt? Why 
would you have to raise the debt limit ceiling if you've lowered the 
debt?
  Well, you may not be surprised that what comes out of Washington is 
not always altogether truthful.
  I have a little chart here that helps to explain what happened and 
why we had to raise the debt limit ceiling when we had a so-called 
``budget surplus'' and were telling the American people that we were 
paying down the debt.
  Now, we had surpluses in Social Security and we had surpluses in 
Medicare, and we had a lockbox. You may remember the lockbox. We had a 
lockbox on Social Security and Medicare surpluses. The lockbox said 
that you couldn't transfer those moneys to the general Treasury, that 
you had to pay down the public debt with those moneys. So what we did 
was take the surpluses from the Social Security trust fund and the 
Medicare trust fund--and there were surpluses there--and we paid down 
the public debt; but for every dollar we paid down on the public debt, 
we incurred another dollar debt in the trust funds.
  You see, the national debt, the debt that really counts, is the sum 
of the public debt and the trust fund debt. So, if you simply decrease 
the public debt by increasing the trust fund debt, you've done nothing 
to the national debt. It's a little bit like taking money from your 
right-hand pocket and putting it into your left-hand pocket. Obviously, 
if you do that, you are neither richer nor poorer after you've taken 
money from your right-hand pocket and put it in your left-hand pocket. 
That is what we were doing.
  Now, very few people know that there is a difference between the 
public--oh, the public debt is the Wall Street debt. That's all those 
instruments that we give to people when they loan us money. The trust 
fund debts, of course, are debts that we owe to our trust funds 
because, for many years, we've been taking moneys from the American 
people for Social Security, for Medicare, and for about 50 other trust 
funds--the Highway Trust Fund and so forth--and we presumably are 
taking that money and putting it into trust for them.
  Is that what happens? No, that is not what happens.
  What happens is we take that money, and if we have any surplus money 
after meeting our Social Security and Medicare obligations, we then 
take that money and immediately convert it into a nonnegotiable U.S. 
security. We move it over to the general trust fund and we spend it. So 
there is, in fact, no money in the Social Security trust fund or in the 
Medicare trust fund. That is really a misnomer. It is not a trust fund. 
I guess you might call it a ``trust debt'' because there is nothing 
there but IOUs.
  Now, this year, for the first time, we've spent more money on Social 
Security than we took in in Social Security. We didn't expect that to 
happen for several years, but we still have about, I think, $2.5 
trillion of surpluses in the Social Security trust fund, so we'll be 
paying Social Security for a while if we can collect or can borrow 
enough money from other places to make up for the money that we took 
from the Social Security trust fund and spent.
  So, for those months and a couple of years, we were telling people we 
were paying down the debt. I talked to the CBO, and I think there was 
never a moment in time, if we kept our books on the accrual method--
which, by the way, we require every small business to do--when the 
national debt went down.
  Now, another thing: The debt will always go up more than the 
advertised deficit. How can the debt go up more than the advertised 
deficit? The debt goes up more than the deficit because we make the 
silly statement that the Social Security surplus and the Medicare 
surplus offset the debt. Of course, if you take that surplus and spend 
it, it simply incurs another kind of debt.
  Well, I hope this helps you to understand. I just thought you'd like 
to know.

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