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  • Social Security Surplus Withers, But That's No Surprise

    Where's the surplus?

    Hundreds of thousands of recession-induced retirements are proving to be terrible news for the Social Security Administration, leading to the total decimation of its annual surplus for the first time in 25 years, according to USA Today. But this morning’s headline really doesn’t qualify as “news,” per se, given that Social Security has been headed toward dark territory for quite some time.

    The chief actuary for the Social Security Administration said of today’s “news” that, “Things are a little bit worse than had been expected.” He understates the true extent of the problem.

    This year marks a tipping point for Social Security – for the first time in 25 years, Social Security outlays will exceed revenue, according to Congressional Budget Office (CBO) reports. What’s more, as The Heritage Foundation has warned, Social Security will begin running permanent deficits by 2016.

    There is more bad news on the horizon for the Social Security Administration, as USA Today reports:

    The impact of the recession is likely to hit the giant retirement system even harder this year and next. The Congressional Budget Office had projected it would operate in the red in 2010 and 2011, but a deeper economic slump could make those losses larger than anticipated.

    If that weren’t enough, even more trouble abounds. As the recession pushes more Americans into early retirement (and with unemployment, less tax revenue is collected to support the program), the Social Security Administration will also have to grapple with the retirement of the Baby Boomer generation, who will begin drawing benefits. In short, Social Security will need a taxpayer-funded bailout, unless, of course, government embraces policy solutions to right the ship.

    Heritage expert David C. John says there are three short-term solutions for fixing Social Security, including reducing benefits, increasing retirement savings and raising taxes. John writes that the first two options will take time, but could be effective, while raising taxes is merely an easy way out that should be avoided:

    The first two will take years to have a real effect. Accounts of any size need to grow for about 20-25 years before they are large enough to pay much in the way of retirement benefits. Moreover, benefit changes are politically feasible only if current retirees and those close to retirement are not affected, which means that it would be several years before benefit changes start to take effect.

    On the other hand, some prefer tax increases because they would immediately pump money into Social Security. But that band-aid would just delay the start of real long-term reform and make it much more likely that Congress would keep taking the easy way out by raising taxes.

    Today’s news – or “reminder” – should be a wake-up call for the Obama administration and Congress. The Social Security system needs help, and it’s time to look at real solutions to the problem.

    Posted in Economics [slideshow_deploy]

    20 Responses to Social Security Surplus Withers, But That's No Surprise

    1. Serenity seaofsereni says:

      It's American citizens that need the wake up call. America will not improve until the citizens recognize that Social Security is an entitlement program. We need to be responsible for preparing for our future and not dependent on the government to do it for us. When we surrendered the responsibility of preparing for our future to the government with the establishment of Social Security, we allowed the government control of our future. We are only reaping what we have sown and are now more dependent on the government then ever before.

    2. Bobbie Jay says:

      The problem is, there is no discipline in government! Whoever was or continues to be behind the stealing of social security should be jailed. WE WANT REPRIMAND.

      we want NO CORRUPTION ANYWHERE IN GOVERNMENT! we want people who have integrity and dignity to serve the people. The 10 I can name, isn't enough…

      Where government is, corruption lives.

    3. jim wyrick says:

      They could care less back in DC, they don't pay into the program. They are taken care of for LIFE! The only Federal employee who does two terms, is a millionaire, and gets full retirement benefits immediately. Our soldiers don't have it this good, not even close, and they(the military) are truly working for you and me!

    4. Marty says:

      Social Security was a shell game from the start. A pyramid scheme. The only way to really fix it is to dismantle it.

    5. Ron Livaudais, Phoen says:

      Social Security is a Ponzi Scheme…less and less workers are subsidizing

      more and more retirees. Until Social Security(where's the security?) is eliminated

      and replaced with an account that each individual owns, like a 401-k and IRA,

      we will be on the brink of economic disaster.

    6. Chris USA says:

      Americans need to wake up to the fact that social security for anybody 40 and under is nothing more than an income tax. There is zero percent chance they will ever see any of that money again. The only way out of this governmental fiasco is to dramatically shrink the government immediately and keep it small in the future.

    7. Richard Hart----OR 9 says:

      Has Congress ever paid back the money that they stole, (I mean borrowed) from the Social Security Fund? If not why not? A repayment plan should be set up for this.

    8. Jeanne Stotler,Woodb says:

      Social security and Medicare are NOT intitlements, we who worked paid into these for years while being told that we would get a return on our money. If a major Insurance company did what the US Gov't. did they would be putting the CEO in federal prison. The original idea was that this money was to be invested in treasury bonds and kept seperate from the gen. fund. Congress saw it as a cash cow and OWES the fund, the gov't. needs to look hard at it's budget, start cutting where jobs are being done by not one person but in some instances there are up to 5 people doing the same job. A freezing on Federal gov't jobs needs to be implimented and in some instances there should be buy outs in some branches. One thing I firmly believe in is a national sales tax lieu of fed. Income tax, therefore everyone pays fair share, exceptions would be food and medicines, states already do this although some like Va. also have a state income tax, and as with federal the richer you are the less percentage you pay. I think Bush was right, those who want should be able to have their own fund and it should be tax free until it's used, this could be by lifting the amount you can have in either Roth or IRA etc. Also pensions need to be overseen by someone, I've never gotten my late husbands and his Co. METRO won't talk to me nor give me a copy (he never got) of his papers, so I am dependent on my SS to survive.

    9. MR.LEONARD FELMAN, P says:

      YOU ARE ALL FORGETTING, SSD & SSDI, WITH CLOSE TO 10% OF ABLE BODY PEOPLE, HALF WORKING UNDER THE TABLE INPUT AS WELL AS OUTPUT IS KILLING THE US.

    10. nadine sand says:

      We now require Congress, who has taken our SS funds and spent on other things, including adding Schip costs to SS, to reduce their own benefits across the board. including retirement and health care. Lets start at the top and the cause of this loss. Take all measures to ensure SS remains viable. and federal employees pay first, not the people.

    11. Norma from Nebraska says:

      The barn door has been open for years and the horse is long gone . . . too late to worry about who left the door open in the first place. But it sure would be nice to know who we should hang from the nearest tree like they used to do in the Old West?

      Did you know that the government routinely has "raped and pillaged" the Social Security Trust Fund FOR YEARS in order to continue spending money not available from other sources, a slush fund kind of like the remaining money in the Stimulus Package or the money repaid to the TARP Fund? If so, do you think politicians have had any obligation at all to rectify this form of thievery or even TRY to do something other than sit on their thumbs? Oh, I forgot, this doesn't effect them and their retirement . . . boy we should just give thanks for all THEIR dedication and concern for citizens across this country!

      "Social Security was saved from bankruptcy in 1983 by a bipartisan deal that increased payroll taxes, taxed some benefits and gradually raised the retirement age to 67. That was supposed to keep the system solvent at least until 2058, but the projection has slipped to 2037." UH-OH . . . SURPRISE!!! We have run out of money 27 years early! What will we do?

      I find it interesting that in 1983 Democrats and Republicans alike made a deal to increase payroll taxes deducted from OUR paychecks in order to continue the farce of building up the imaginary "Trust Fund." And just to make sure enough money was going to be generated, other benefits and raising the retirement age to 67 were included. Our elected officials DID NOT tell us it was because THEY had spent all the money. No, then like now, we are being told that the Trust Fund cannot sustain the payments going out and so "something" must be done . . . . by US, not them! Except this time, we KNOW the truth about the Trust Fund that isn't there, and we are not going to fall for this B.S anymore. I don't know about our "Washington Elite", but in my book that is misappropriation of funds and should result in prosecution for all who participated in the original travesty and its continued cover-up . . . . with consequences of fines, penalties and JAIL time at the very least!!!!!

      Just exactly how much do you think we taxpayers should trust our elected officials in Washington to build up money for the health care reform takeover in four years? You know, the "pay now, receive later" bill they are trying to FORCE onto us? Do you think we should be able to TRUST them to save that money for the implementation of the program four years from now, to do the right thing??? They all must think we are really stupid . . . well, we'll see how STUPID we are come November of this year!

    12. Kerry says:

      The government has been stealing my money ever since I was 16, and I will never see a dime of it. It is very sad to me. You do all you can to work and get ahead and the government does nothing but get in the way of success. My husband and I are doing everything we can to try and prepare for retirement. If I could have the money the government steals from me each paycheck, then I could get a lot further. Sad thing is, I am being forced to continue to contribute for another 30 years knowing I will never my money again. That's the sick thing.

    13. ann kitay fulton,tx says:

      To those of you who have a few years to go beofre filing for SS, a bit of advice I gave my husband eons ago – we should be saving the same amount that is taken out of our paychecks every week. He thought I was nuts! Now he's dead and, at 73, I depend on the SS check – am not a happy camper. Just match what the government takes out for SS/FICA each payday and then forget you have it. We are living longer and I now worry about my daughter who's in her early 50's. Heads up!

    14. Wayne Simanovsky Sti says:

      Another way to stop the loss of social security monies is to put a lock on the account to keep politicians from dipping into it. Politicians have been taking money from SS for almost as long as SS has been around with the promise of repaying it back. You know politicians lie and they never repaid the money back. This would be a good start.

    15. Micki-Tamarac, FL says:

      After stealing OUR money for all these years THEY continue to increase their wages and BORROW more from OURS. These people are theives and we the people can do nothing to stop them. They need to get cuts in their wages and repay the people that have been paying and paying for all these years. This is one Entitlement that we have paid for. Quiit giving it to ILLEGALS and repay the people that have been paying into this farce that I have paid into for the last 40 some years. Give me my money back and I am sure I can do better than the theives in Washington. Vote in 2010 and pay attention to all candidates Dems and Reps, make them accountable.

    16. Jeff, Iowa says:

      Gee, it’s crazy, the government is in control of something, and they are screwing it up…shocker!!! It’s been happening for a long time and nobody has done anything about it. Instead of fixing what we should and rewarding those who choose to work and lives moral lives, we do the opposite. Nobody is “entitled” to a free health care, a free house, free food, or free anything; we all know where this idea comes from and it just doesn’t work. We pay people to “not” work, to have babies out of wedlock, and to sit around in prisons without making them do something to benefit themselves and society. We give banks money when we know they will not pay it back and we give houses to people who cannot afford them. There are so many people who think like this. Why are we not being represented in our so-called leadership? I thought their job was to vote for what their constituents wanted. People from the U.S. are so lethargic and apathetic. We watch and only complain while our so-called leaders defy our will. We sit idly back and permit them to rape the constitution and take away our rights. America, wake up!!!

    17. Jim G. says:

      Having the distinct pleasure of being a Grand Parent to 15 Grand Children, i can think of no other issue clouding their financial future that compares to the Social Security taxing scheme implemented with the signing of the 1983 Social Security reform legislation. Politicians have used this weapon to turn 2.5 trillion dollars of potential social security trust fund assets into 2.5 trillion dollars of social security trust fund liabilities. .Soon we will introduce a solution to this insanity, and the surrounding issues.

    18. Tom, Cypress Califor says:

      I have a friend who is 63 years old and decided to take social security and retire. The great part is that she is also taking unemployment insurance. All she has to do is fill out some forms and bingo extra money. By the way she has been doing this for a year, ran out of benefits and was given another year of extended benefits. What a country.

      I wonder how many baby boomers are doing the same thing and what kind of impact that has on the unemployment figures.

    19. Taylor....Nebraska says:

      What frickn' IDIOTS think the Cost of Living is or has gone Down or NOT INCREASED?? Ergo..no Cost of Living increase for 2010 for those of us on Disability. Most likely the SAME "IDIOTS" who Vetoed the $250 Stimulus for 2010 that had been bantered around. I am Seriously Wondering IF I am the ONLY one who remembered way..way back when…one of our Esteemed Legislators found out that Social Security had "Millions" in SURPLUS just laying around NOT doing anything but Securing the solidity of Social Security. But of course being the GREEDY S.O.B.'s the ALL are found a way through the Loop Holes to use this money … no doubt to give away to a numer of their "Special Interests Groups". But with the PROMISE that this money was to be paid back??? At the rate of Inflation over the years those "Millions" that they STOLE…would surely be worth "Billions" today. I say it's Long…Long past time this Money is Paid Back to the Dept. of Social Security!!! Then hopefully once this unbelievable and most highly Illegal isue is set right…I do NOT beleive the Public ( Baby Boomers most of all!! ) would allow ANYONE to Touch it…again!!!

    20. dunnage says:

      Over 2 Trillions Dollars in excess of benefits has been paid into SS — who's bailing out whom?

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