The Congressional Budget Office recently projected that the federal government will have a $63 billion surplus this year and a $1.6 trillion surplus over the next decade. As a result, members of Congress have proposed additional spending programs or tax cuts to be paid for with the surplus revenues. Most notably, House Speaker Newt Gingrich and Budget Chairman John Kasich have proposed a $700 billion tax cut over the next ten years.

"Unfortunately, we don't really have a surplus. The CBO budget projections don't tell the whole story," Smith explained. "We currently have a surplus in the Social Security trust fund, because right now workers pay more into the fund through payroll taxes than retirees draw from the fund. The government borrows this surplus. What most people don't realize is that the borrowed money is counted as income for the federal government — not borrowed money that needs to be repaid. That's why it looks like we have a surplus, but in reality we don't."

When Social Security trust fund money is taken out of the budget projections, the so-called surplus disappears. The federal government will borrow $81 billion this year from Social Security, so instead of a $63 billion surplus, the federal government will still have an $18 billion deficit this year. The $1.6 trillion in surpluses projected for the next 10 years turns into only $250 billion in surpluses when Social Security revenues are deducted.

"A real surplus of $250 billion does mean that we're finally heading in the right direction, but if we return to the fiscally irresponsible ways of the past, we're just going to sink deeper and deeper into debt," Smith said. 

Smith urges his colleagues in Congress to be honest with the American people about the budget numbers.

"I find these kinds of manipulations of federal budget numbers deeply disturbing," Smith said. We need to have an honest debate — should we provide a $700 billion tax cut if it means we continue borrowing from the Social Security trust fund and sink deeper into debt? Should we dramatically cut programs like education, Medicare, and defense in order to provide a $700 billion tax cut? Or should we hold the line on both increased spending and tax cuts until we reduce the national debt? Unfortunately, when elected officials are dishonest about the numbers, they can make it sound like we can have a $700 billion tax cut and increased spending without any real sacrifice, because we can take it out of the so-called surplus. Well, folks, it's time to be honest — that surplus doesn't really exist."

Smith says that he believes the federal government should start repaying the money borrowed from the Social Security trust fund and stop borrowing from the fund altogether. "Once we've stopped borrowing from the trust fund and going further into debt, then we can talk about what do with any extra money that we might have," Smith said. "Personally, I think we ought to start paying down our $5.4 trillion debt so that debt payments don't continue to eat up 14% of our yearly budget, but the first step towards resolving this issue is having an honest debate."