General Discussion
In reply to the discussion: Social Security Disability Seen Insolvent Unless Congress Votes [View all]HiPointDem
(20,729 posts)The investment rules governing payroll tax income were also established in the 1935, and are essentially the same ones in use today.
Specifically, the 1935 Act stated: "It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals.
Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States." (See Title II, Section 201of the 1935 law)
In the 1939 Amendments, a formal trust fund was established and a requirement was put in place for annual reports on the actuarial status of the fund. Specifically, the law provided: "There is hereby created on the books of the Treasury of the United States a trust fund to be known as the 'Federal Old-Age and Survivors Insurance Trust Fund'. . . . The Trust Fund shall consist of the securities held by the Secretary of the Treasury for the Old Age Reserve Account on the books of the Treasury on January 1, 1940, which securities and amount the Secretary of the Treasury is authorized and directed to transfer to the Trust Fund, and, in addition, such amounts as may be appropriated to the Trust Fund as herein under provided." (Title II, Section 201a)
http://www.ssa.gov/history/BudgetTreatment.html
"invest in US securities" = lend money to the US government in return for US securities, i.e. lend the money to the general budget.