No single president “started borrowing” from Social Security in the way the phrase suggests. The mechanism was built into the program from the beginning: Franklin D. Roosevelt signed the original Social Security Act on August 14, 1935, and that law required the Treasury to invest any surplus payroll tax revenue in interest-bearing government bonds. Ronald Reagan is more commonly blamed for borrowing from Social Security because the 1983 amendments he signed generated the first massive annual surpluses, sending hundreds of billions of dollars into the Treasury’s general fund in exchange for government IOUs.
So the accurate answer depends on what the question really means. If it means who created the legal pipeline, that was Roosevelt. If it means who presided over the moment large amounts of cash actually started flowing, that was Reagan.
How the Borrowing Actually Works
Social Security runs through two trust funds at the U.S. Treasury: the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund. Payroll taxes flow in, benefits flow out. When incoming taxes exceed outgoing benefits, the leftover cash doesn’t sit in a vault. By law, the Treasury invests it in special-issue government bonds that earn a market-based interest rate, and the Treasury then spends the cash on whatever else the government is paying for.
In return, the trust funds hold bonds representing a legal claim on future revenue. They carry the full faith and credit of the United States, the same backing behind any Treasury security. The interest rate is set by a formula pegged to the average market yield on Treasury securities with at least four years to maturity, rounded to the nearest eighth of a percent. In 2023 alone, the trust funds earned roughly $67 billion in interest.
This is what people mean by “intragovernmental debt.” When commentators say the government borrows from Social Security, they’re describing this internal exchange of cash for bonds. It has happened continuously, under every president, since the program began collecting money.
Roosevelt Built the Mechanism in 1935
Title II of the 1935 Social Security Act established an Old-Age Reserve Account in the Treasury and required the Secretary of the Treasury to invest any surplus not needed for current withdrawals in interest-bearing obligations of the United States. The law authorized “special obligations” issued exclusively to the account, initially bearing 3 percent annual interest.
The very first Social Security law built the borrowing pipeline into the system’s DNA. Roosevelt’s administration didn’t treat this as a workaround. Treasury bonds were considered the safest place to park workers’ retirement money, and the alternatives, such as letting the government accumulate huge cash reserves or invest in private markets, raised serious concerns about government power over the economy. The 1939 Amendments added a Board of Trustees, but the core investment requirement barely changed from the 1935 original.
Every dollar of Social Security surplus that has ever gone to the Treasury has done so under this rule. No president since Roosevelt has needed to authorize it, and no president could have stopped it without new legislation.
Johnson and the 1968 Unified Budget
In 1968, President Lyndon Johnson adopted a “unified budget” that folded Social Security and other trust funds into the overall federal budget presentation. Before this, Social Security’s finances were reported separately, making it obvious that its surpluses were distinct from general revenue.
The unified budget didn’t change the legal mechanics one bit. The Treasury was already investing surpluses in bonds under the same 1935 rules. What changed was the optics: Social Security’s surpluses now offset the reported federal deficit, making the government’s fiscal position look healthier than it otherwise would. Critics have argued this presentation obscured how much the government relied on Social Security money to finance other spending. The practice continued until the Budget Enforcement Act of 1990 formally moved the trust funds “off-budget,” meaning their income and spending no longer count toward the official deficit or surplus.
Johnson didn’t start the borrowing. He changed how it appeared on the government’s books.
Reagan and the 1983 Surge
Reagan’s signature on the Social Security Amendments of 1983 is what turned the borrowing pipeline into a torrent. He signed the law on April 20, 1983, during a genuine crisis: without action, the system would have been unable to pay full benefits by July of that year.
The amendments came out of the National Commission on Social Security Reform, chaired by Alan Greenspan and appointed by Reagan in late 1981. The commission was deliberately bipartisan, and the legislation passed with broad support from both parties. The explicit goal was to build a large reserve in advance of the Baby Boomer generation’s retirement, meaning decades of surpluses that would later be drawn down.
Those surpluses materialized quickly. Annual revenue began consistently exceeding benefit costs by tens of billions of dollars, and the Treasury converted every dollar of surplus into special-issue bonds under the mechanism Roosevelt had established. By the time the trust funds peaked, they held roughly $2.9 trillion in government securities. That is real money the Treasury spent on other priorities and is now legally obligated to pay back.
This is why Reagan’s name gets attached to the borrowing story even though he didn’t create the borrowing rule. The 1983 amendments raised payroll taxes ahead of schedule, gradually raised the full retirement age from 65 to 67, made up to half of Social Security benefits taxable for higher-income recipients starting in 1984, and brought new federal employees and members of Congress into the system. Together, those changes produced the surpluses. The 1935 law dictated where the surplus cash went.
Where the Trust Funds Stand Now
The surplus era is over. Since 2021, the Old-Age and Survivors Insurance Trust Fund has been spending more than it takes in, even counting interest income, and is now redeeming bonds to cover the gap. At the end of 2024, the OASI fund still held about $2.5 trillion in reserves. The Congressional Budget Office projects the combined Social Security trust fund balance will be roughly $2.08 trillion by the end of fiscal year 2026.
According to the 2025 Trustees Report, the OASI fund is projected to be depleted by 2033. If nothing changes before then, incoming payroll tax revenue would still cover about 77 percent of scheduled benefits. Combining the retirement and disability trust funds pushes the projected depletion date to 2034, with 81 percent of benefits payable from ongoing revenue.
The bonds themselves are not at risk of default. They carry the same legal standing as any other Treasury obligation, and no congressional appropriation is required to redeem them. The 1983 amendments shielded Social Security from across-the-board budget cuts, and the Budget Enforcement Act of 1990 reinforced that protection by placing the trust funds off-budget. The challenge of paying the bonds back is fiscal and political, not legal.
Why Naming One President Misses the Point
Roosevelt’s 1935 law created the borrowing mechanism. Johnson’s 1968 budget change masked it. Reagan’s 1983 amendments supercharged it. Every president and Congress since 1935 has operated under a system in which surplus payroll taxes automatically flow to the Treasury in exchange for bonds. No president diverted the money through a back-room deal. The law has always required it.
The genuine debate isn’t over who started borrowing. It’s over what happens now that the borrowing era has ended and the repayment era has begun.