US president Bush's tax cut package combined with a dramatic economic downturn will force the government to spend $9 billion (€8.2 billion) from the Social Security surplus to pay other government bills, the non-partisan Congressional Budget Office said yesterday.
Social Security funds are drawn from payroll taxes to provide a guaranteed minimum income for people over 62 years old.
The need to spend payroll taxes earmarked for Social Security does not comport with any promises made to voters by President Bush during the election.
It also directly contradicts a promise made in the Republican National Committee's Platform which stated: "The Social Security Surplus is off-limits, off budget and will not be touched."
According to the CBO report, which paints a far more pessimistic picture than the one drawn last week from the White House, the government appears to have virtually no surplus outside of Social Security in 2002, then is projected to use another $18 billion in 2003, even before additional spending for education or defence sought by both parties is considered.
The CBO, which although non-partisan is headed by a Republican appointee, found that the overall federal budget surplus projected for the fiscal year that ends on September 30th had dropped to $153 billion, down $122 billion from its estimate in May.
The Congressional budget analysts found that the Bush $1.3 trillion tax-cut package was responsible for about two-thirds of that reduction.
Democrats, led by influential Senator Robert Byrd, plan to use the issue of Mr Bush's flawed economic projections as a way to defeat expensive budget proposals sought by the White House, including the $18 billion missile defence plan.
"It is now clear that the President will be raiding Social Security and Medicare trust funds even when he is forecasting strong economic growth," Senator Kent Conrad, the North Dakota Democrat who is chairman of the Budget Committee said.
Only last week, Mr Bush said that Social Security revenues should be used for other programs only if the government was in recession or at war.
In a prediction that will be closely monitored, the CBO analysts said that the economy should "narrowly" avoid a recession, with growth of about 2.6 per cent next year.
The Bush administration has estimated growth of 3.2 per cent, which Democrats say is inflated and a gimmick meant to obscure the likelihood of additional drains on Social Security.