It has been contended that Social Security is going bankrupt. This year is going to be a mark in favor of that viewpoint. The tax income the Social Security Administration takes in this year can be less than they are due to pay out. This is not the first time Social Security has run in the red, either. The SSA flirted with insolvency within the early 1980s. There is a trust fund that Social Security puts the extra money into, which is how they’ll cover the loss.
Social Security income to be exceeded by spending
As outlined by the Los Angeles Times, the Social Security Administration will spend more than it will earn this year. The trustees of Social Security and Medicare released a report on Thursday, August 5, that reveals Social Security has more payments for making to Social Security recipients than funds it is due to acquire by the end of 2010. The health care reform bill will purportedly streamline Medicare, and it’s expected to stay solvent until 2029. Medicare had previously been given until 2017 before it fell into insolvency. More incentives and regulations are expected to stave off Medicare’s impending demise.
Social Security could be raiding their trust fund
The Social Security Administration maintains a trust fund for itself. Anything left over after expenditures gets put in the trust fund. The fund is there in case of shortfalls. This sort of instance was precisely why they have it. The Social Security Trust Fund, as outlined by the New York Times, is projected to run out by 2037. The Social Security Administration will nevertheless be able to make 75 percent of its payments if the numbers are accurate, according to the Social Security commissioner Michael Astrue.
Not enough Peters to pay for Paul
Tax revenues are how Social Security is funded. The fewer individuals that are working, the fewer dollars it receives. More money has to be paid out as people live longer and longer lives. This unique Social Security shortfall won’t affect people’s benefits, but the next one might.
Further reading
nytimes.com/2010/08/06/us/politics/06benefits.html
latimes.com/news/nationworld/nation/wire/sc-dc-0806-social-security-20100805,0,6306255.story
