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Social Security
The End of Social Security
Without the help of Congress, the trust funds that support Social Security will run out of money by 2033, according to our trustees who oversee the retirement and disability program. By 2033, Social Security would collect only enough tax revenue each year to pay about 75 percent of benefits. The cuts to benefits may not sit well with the millions of elderly Americans who rely on Social Security for most of their income.
Read it at Des Moines Register
3 comments on "The End of Social Security"
October 01, 2012 9:20pm
The GOP (Republican Party) will be long gone by that time, and so will this sort of thinking.
October 06, 2012 6:32am
love boris, rocky and bullwinkle
October 02, 2012 11:01pm
Is Social Security really "exhausted?" Not at all
By Mark Miller | Reuters
It amazes me the lack of knowlege about S.S. or proper information from so many of the commentors above. So, what's really going on with Social Security?
Social Security is NOT running out of money.
The commissioner of the Social Security Administration, Michael Astrue, warned in issuing the trustees' annual report on the financial health of the Social Security program "Please, please remember that exhaustion is an actuarial term of art and it does not mean there will be no money left to pay any benefits."
"After 2033, even if Congress does nothing, there will still be sufficient assets (from payroll taxes) to pay about 75 percent of benefits. That's not acceptable, but it's still a fact that there will still be substantial assets there," Astrue insisted.
Astrue went out of his way to emphasize that the program is far from broke. Social Security took in $69 billion more than it spent last year. the Social Security Trust Fund (SSTF) had reserves of $2.7 trillion last year.
The surplus funds are invested in "special issue Treasury bonds" and they are "full faith and credit" obligations of the government to Social Security. Since Social Security can't borrow money by law, it uses those reserves to pay benefits whenever cash on hand runs short.
Our aging demographics do play a role in the longer range imbalance after 2033, because we have not raised revenue sufficient to match the projected growth in our retired population.
"The choice is to either reduce benefits 25 percent, or raise revenues 33 percent to adapt," says Steve Goss, chief actuary of the Social Security Administration. Making reforms sooner rather than later would allow for a more gradual phase-in, giving the public plenty of time to plan and adjust accordingly.
I'm in favor of a modest, graduated payroll tax increase. Social Security benefits are modest, averaging $1,230 per month this year. It's the main source of income for most people over age 65 - more than half for nearly one in two married couples and two in three unmarried individuals, according to the National Academy of Social Insurance.
A gradual increase in payroll taxes over the next decade would eliminate a sizable portion of the imbalance; another approach is to lift or remove entirely the cap on wages subject to payroll taxes, which currently is set at $110,100.
Perhaps that won't be too exhausting an idea for Congress and the media to embrace.