There is no way to "lockup" the excess payroll taxes collected from workers today under the current system. As has be made clear by various participants, the Social Security surplus is immediately spent by the treasury and SS is given non-marketable bonds. Those bonds are really IOU's that will have to be paid by younger workers.
The only way to assure that the SS surplus payroll taxes go to pay retirement benefits is to change public policy immediately to permit workers to create Personal Retirement accounts using some portion of their FICA taxes. Then the surplus will have to be used to honor benefits to current retirees. It can no longer be spent by the Administration and Congress for all sorts of mischief. It was earmarked for SS benefits and should be spent for that alone.
The fascinating light that turned on for me during this discussion is that the Trust Fund is a devious way to mask future Social Security costs. The IOU's will be redeemed from the General Fund and workers will no longer be able to determine just how bad their returns are because they will have no way of knowing what part of their federal income tax goes to shore up pay-as-you-go SS.
Carolyn Cox, National Director of Economic Security 2000
