Treasury Mistake Overpays Interest To Social Security
December 21, 1998
An error 18 years ago has resulted in the Treasury Department overpaying Social Security and other trust funds by hundreds of millions of dollars a year. The mistake was made when calculations were switched to computers from paper.
- The Treasury estimates it has credited Social Security trust funds with $1.4 billion in undeserved interest payments over the past 10 years -- and will credit them with about another $3 billion during the coming decade on bonds that have been issued.
- Roughly equal sums have and will be paid to Medicare, civil-service retirement and other smaller trust funds.
- Because of a mistake in calculating interest on a $26.4 billion government securities fund into which federal employees make voluntary payments, taxpayers have been paying about $33 million a year in undeserved interest to these employees.
- The Treasury has paid about one-eighth of a percentage point more interest in certain years than it would have had its computers been properly programmed beginning in 1980.
Source: David Wessel, "Treasury Interest-Calculation Mistake Has Benefited Social Security for Years," Wall Street Journal, December 21, 1998.
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