No president has ever taken money out of Social Security and spent it on something unrelated. What people mean when they ask what presidents borrowed from Social Security is really a handful of policy and accounting decisions made by Lyndon Johnson, Ronald Reagan, Bill Clinton, George W. Bush, and Barack Obama. Each one gets described as a raid. None of them was.
The underlying mechanism has worked the same way since payroll taxes were first collected in 1937. Under 42 U.S.C. ยง 401, any Social Security money not needed to pay current benefits must be invested in interest-bearing Treasury securities or securities the government guarantees. The Treasury issues special bonds to the trust fund, takes the cash, and uses it alongside all other federal revenue to fund government operations. The trust fund earns interest and holds a legal claim on every dollar. The Social Security Administration compares it to a bank checking account: the bank records your deposits and pays interest while using the cash for other purposes in the meantime.1Social Security Administration. Social Security Trust Fund Cash Flows and Reserves2Office of the Law Revision Counsel. 42 USC 401 – Trust Funds
That process is what critics across five decades have called borrowing. It is not discretionary, and no president invented it. Here is what each of the presidents commonly accused actually did.
Lyndon Johnson and the Unified Budget
Johnson is the president most frequently blamed, and the charge is almost entirely misplaced. In early 1968, his administration adopted a “unified budget” that combined Social Security’s finances with the rest of the federal government’s books into a single document.3Social Security Administration. The Social Security Trust Funds and the Federal Budget Before that change, the trust fund’s surplus appeared separately. After it, the surplus reduced the reported size of the overall federal deficit.
The timing helped Johnson politically. Vietnam War spending was climbing, and folding Social Security’s healthy surplus into the government-wide totals made the deficit look smaller on paper. But the unified budget was a presentation change, not a legal one. It gave Johnson no new authority to spend trust fund money. The same securities were still being issued, the same interest was still accruing, and the trust fund’s legal claim to its assets stayed intact.4Social Security Administration. Debunking Some Internet Myths – Part 2
Congress eventually reversed the optics. The Budget Enforcement Act of 1990 formally designated Social Security as “off-budget,” removing its transactions from deficit calculations used in the sequestration process. Even so, Social Security’s finances still appear inside the unified budget totals the government publishes, which keeps confusing people into thinking the surplus is funding other programs.
Ronald Reagan and the 1983 Amendments
If Johnson’s change was cosmetic, Reagan’s was structural, and it went the opposite direction from a raid. By the early 1980s, Social Security was months away from being unable to mail checks on time. A bipartisan commission led by Alan Greenspan recommended sweeping changes, and Reagan signed the Social Security Amendments of 1983.5Social Security Administration. Social Security Amendments of 1983
The law raised revenue from several directions at once. It increased the self-employment tax rate, began gradually pushing the full retirement age from 65 to 67, made a portion of benefits taxable for higher-income retirees for the first time, and accelerated scheduled payroll tax increases. Together those changes generated enormous surpluses through the late 1980s and 1990s.
Those surpluses were invested in Treasury securities under the same rules that had applied since 1937. Reagan did not divert the money. The point of the 1983 law was to build up a reserve large enough to absorb the wave of baby boomer retirements coming decades later. The trust fund’s balance grew from under $30 billion in the early 1980s into the hundreds of billions by the end of the decade, and it kept climbing.
The payroll tax rate set by the 1983 amendments is still in place: 6.2% each for employees and employers, applied to earnings up to $184,500 in 2026.6Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security
Bill Clinton and the Lock Box Fight
The late 1990s produced federal budget surpluses. From 1998 through 2001, total government revenue exceeded total spending. Those surpluses included Social Security’s payroll tax surplus, still folded into unified budget totals. Critics argued Clinton was counting Social Security money as general revenue to make the fiscal picture look better than it was.
Clinton acknowledged the issue publicly. In 1999, he noted that during the deficit years of the 1980s, “the deficits were made to seem smaller than they were because Social Security revenues were in surplus over Social Security payments.” He proposed legislation to create what he called a stronger “lock box,” directing all Social Security payroll taxes toward debt reduction on behalf of the trust fund.7Social Security Administration. President Clintons 1999 Statements
Both parties accused each other of spending the Social Security surplus. Clinton pointed to Congressional Budget Office findings that Congress had already spent more than $18 billion of it. Republicans made similar charges against the White House. The lock box never became law, and the underlying investment mechanism did not change. The trust fund kept earning interest on its Treasury securities regardless of who won the argument.
George W. Bush and the Push for Private Accounts
Bush did not borrow from Social Security either, but he tried to change how future contributions would be handled. In 2005, he proposed allowing younger workers to voluntarily divert a portion of their payroll taxes into personal retirement accounts invested in stock and bond funds. The White House called the existing system’s securities “empty promises” and said personal accounts would replace them with “real assets of ownership.”8National Archives. Strengthening Social Security
The proposal drew intense opposition from both parties in Congress and never received a floor vote. Critics said diverting payroll taxes into private accounts would speed the trust fund’s depletion by cutting incoming revenue while full benefits still had to be paid to current retirees. Bush spent significant political capital on the effort, and its failure is widely counted as one of the defining setbacks of his second term.
The episode illustrated something worth remembering when you hear the word “borrow.” Even a president with strong congressional allies could not unilaterally restructure Social Security. The trust fund’s investment rules are set by statute.
Barack Obama and the Payroll Tax Holiday
Obama came the closest of any recent president to actually reducing money flowing into the trust fund, and he did it openly with a reimbursement built in. In 2011 and 2012, Congress passed and Obama signed legislation temporarily cutting the employee share of the Social Security payroll tax from 6.2% to 4.2%. The goal was economic stimulus during the recovery from the Great Recession.
The detail that usually gets left out: the law required the Treasury to transfer money from general revenue to the trust fund to make up the difference. The trust fund received the same amount it would have gotten without the tax cut. Workers paid less, and the general fund covered the shortfall. This was not a raid on Social Security so much as a temporary rerouting of where the trust fund’s revenue came from. The holiday expired at the end of 2012, and rates returned to 6.2% for both employees and employers.
Are the IOUs Real?
As of September 2024, the combined Old-Age and Survivors Insurance and Disability Insurance trust funds held roughly $2.76 trillion in assets, all of it in special-issue Treasury securities.9Social Security Administration. Fiscal Year Historical and Projected Trust Fund Operations Through 2034 Each bond states on its face that it is “supported by the full faith and credit of the United States” and that the obligation is “incontestable.”2Office of the Law Revision Counsel. 42 USC 401 – Trust Funds
Whether those IOUs are “worthless,” as some commentators claim, comes down to whether you believe the United States will default on its own debt. The same full faith and credit backs the Treasury bonds held by foreign governments, pension funds, and private investors. Defaulting selectively on the trust fund’s bonds while honoring identical obligations to other creditors would be legally and practically unprecedented.
Why the Trust Fund Is Shrinking Anyway
The trust fund has passed its peak and is declining because Social Security now pays out more each year than it collects in payroll taxes. The 1983 amendments anticipated this. The whole point of building a reserve was to draw it down once the baby boomers retired. The problem is that the reserve may not be large enough to bridge the gap.
According to the 2025 Trustees Report, the combined OASDI reserves are projected to run out in 2034. At that point, incoming payroll taxes would still cover about 81% of scheduled benefits.10Social Security Administration. Status of the Social Security and Medicare Programs – A Summary of the 2025 Annual Reports Benefits would not disappear, but they would face an automatic cut of roughly 19% unless Congress acts before then.
That distinction matters when you hear that a president “borrowed” Social Security into a crisis. The trust fund’s depletion does not mean money was stolen. It means the reserve built up over decades is being spent exactly as intended, just faster than the 1983 reforms projected. The gap is driven by demographics: longer life expectancies, lower birth rates, and a steadily falling ratio of workers to retirees. That is arithmetic, not theft.