Factcheck is misleading on Social Security.

According to Factcheck, Bernie Sanders is wrong when he claimed that Social Security did not contribute to the deficit. They point to SS being off-budget, without actually understanding how SS works.

“Politicians decided to classify Social Security and the postal service as ‘off budget’ so that they would be treated as their own programs and not as part of the government,” Goldwein says. “It didn’t work. Everyone uses the unified budget deficit concept.”

Technically, the only people I've seen use the unified budget deficit is the CBO and the politicians who make a big deal about deficit spending for all the wrong reasons. What this signals, however, is that this issue is a point of semantics, only.

But what's misleading about this, is that it implies to many people that SS contributes to the federal debt; it doesn't, except for the margin of the borrowing costs to the federal gov't.

As I've written many times before, the SS Trust Fund buys special (non-marketable) Treasury bonds -- bonds which are used to pay for the federal debt. If I buy a Treasury bond, am I adding to the debt? Only on the margin of the borrowing cost, right? Mind you, that margin remains close to historical lows. For a bond to count as adding to the debt in the way people imply, it would thus be counted twice.

To highlight Factcheck's misunderstanding, they conflated federal spending with SSTF spending.

For years, Social Security was a boon to the government’s bottom line, lowering the deficit and even causing a budget surplus in 1998 and 2001. But now outlays outpace revenues, and the government has to use deficit spending to honor its obligations to the program.

That's extremely misleading. Of course the Trust Fund lost its primary surplus; it's been this way for a few years now, with baby boomers retiring in droves and Americans living much longer than anticipated. But again, because the Trust Fund invests into Treasury bonds, the federal government is not using deficit spending to honor the Trust Fund's obligations, except on the margin of borrowing costs, as it rolls debt over.

If you pore through their lengthy writeup, they know that only an Act of Congress can conflate general budget with the Trust Fund's. In practical terms, this means that Congress could always make contributions to the Trust Fund to pay for the shortfall (between revenue and outlays). Now pay attention here, because this is the aha! moment: When Congress does make a contribution to the Trust Fund, it will increase the federal debt, but not before. Aha!

I don't often write long form these days, but I had to call out Factcheck's deception, because they've only further entrenched falsehoods with the American public and media.