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HRD-86-45 1 (1985-12-05)

handle is hein.gao/gaobabnuw0001 and id is 1 raw text is: RELEASED COMPTROLLER GENERAL OF THE UNITED STATES IWASHINGTON D.C, 20648 December 5, 1985 B-221077 The Honorable James R. Jones, Chairman Subcommittee on Social Security Committee on Ways and Means House of Representatives 128621 Dear Mr. Chairman: Subject: Treasury's Management of Social Security . Trust Funds During the Debt Ceiling Crises (GAO/HRD-86-45) In your November 1, 1985, letter, you asked for our opinion on the legality and propriety of the Secretary of the Treasury's management of the Social Security Trust Funds (Federal Old Age and Survivors' Insurance Trust Fund and Federal Disability Insurance Trust Fund) during the government's October 1984 and September-November 1985 public debt ceiling crises. You also asked for factual information on the Department of the Treasury's actions regarding the Trust Funds and the effects of those actions on the Funds' long-term investments. Appendix I addresses the legal issues raised in your letter. We conclude that, although some of the Secretary's actions appear in retrospect to have been in violation of the requirements of the Social Security Act, we cannot say that the Secretary acted unreasonably given the extraordinary situation in which he was operating. On the other issues you raised, we conclude that: --Treasury may restore any interest lost because of failure to fully invest the normalized tax transfers. --To the extent that the Trust Funds' assets were kept uninvested to permit the payment of other obligations of the government or to restore cash balances, the Trust Funds were being used to sustain the government's operations contrary to the statutory scheme. --Because the Trust Funds transactions did not increase the total amount of outstanding debt subject to the statutory limit, the Secretary did not violate the statutory debt limit and did not usurp the congressional power under the Constitution to borrow. (105507) 2 -'4, J

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