Which administration or President began the practise of using the
social security funds as general income to be spent by the government
instead of putting the money into a Social Security Trust Fund.

Hi nickc4388,

Social Security funds have always gone into the Social Security Trust
Fund, and this has not changed since the Trust Fund was created in
1939.  But the money does not just sit in the Trust Fund doing
nothing.  Some of it goes to pay out benefits, and the government
invests the rest in Treasury bonds, in effect lending the money to
itself, so as the borrower, it can then spend the money on other
things than Social Security.  But in principle, the Social Security
Trust Fund eventually redeems the Treasury securities and gets the
money back with interest.  Meanwhile, the debt to the Trust Fund is
part of the national debt.

There has been a change in how the Trust Fund was treated in Federal
accounting.  In 1969, due to action by the Johnson administration in
1968, the government began to include the Social Security Trust Fund
in the "unified budget."  This was only an accounting change; it did
not change anything about how the money was used or decisions were
made.  The change was undone in 1990 when the Trust Fund was again
separated from other accounts in the budget.


References

The Social Security Administration has a couple of FAQ pages titled
"Debunking Some Internet Myths."  Question 1 in part 2 is similar to
yours.
http://www.ssa.gov/history/InternetMyths2.html

Myth 4 in part 1 is also similar, but they say it is not exactly a myth.
http://www.ssa.gov/history/InternetMyths.html

Snopes.com has a page on Social Security that also addresses your question.
http://www.snopes.com/politics/taxes/sschanges.asp


Additional Links

Wikipedia's article on Social Security has a paragraph on the Trust Fund.
http://en.wikipedia.org/wiki/Social_Security_(United_States)#Social_Security_Trust_Fund

The AARP has a Fact Sheet, "Social Security Trust Funds: Some Basics."
http://www.aarp.org/research/socialsecurity/financing/aresearch-import-353-FS40R.html

David C. John explains how the Trust Fund operates for the Heritage Foundation.
http://www.heritage.org/Research/SocialSecurity/em940.cfm


I hope this information is helpful.  If anything is not clear enough,
please ask for a clarification.

--efn