Before 2010 Social Security payroll taxes exceeded the amount needed to pay benefits. That surplus (which no longer exists) was invested in special US Treasury Bonds. Those bonds pay the Trust interest. The current incoming payroll taxes PLUS a portion of the interest payments are now used to pay benefits.
THE PROBLEM IS that in a few years the combination of interest and taxes will not cover the benefit payments and the BONDS WILL HAVE TO BE REDEEMED. Then what happens? The explanation from OMB several years ago is shown below. Nothing has changed since.
The Clinton Administration’s Office of Management and Budget explained this back in 2001:
These balances are available to finance future benefit payments and other trust fund expenditures–but only in a bookkeeping sense…. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.