Doom, despair, and a guarantee of fear and loathing has been forecast for Social Security for a long time. This year is going to be a mark in favor of that viewpoint. The Social Security Administration is going to pay out more than it takes in. This is not the very first time Social Security has run in the red, either. The SSA was subject of a lot of turmoil in the 1980s. Social Security sustains a trust fund where it holds all funds, and shortfalls are precisely what the fund is there to counteract.
Social Security income to be exceeded by spending
This year, as outlined by the Los Angeles Times, the Social Security Administration will spend more than it will earn. The trustees of Social Security and Medicare released a report on Thursday, August 5, that reveals Social Security has more payments to make to Social Security recipients than funds it is due to acquire by the end of 2010. After the new health care reform bill passed, Medicare was 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 Trust Fund will be cracked
There is a trust fund that Social Security has just in case. Tax income that’s left over after expenditures goes into the trust fund. In case of a shortfall, that’s what the fund is there for. That’s why it was created. The Social Security Trust Fund is projected to run out by 2037, according to the New York Times. The Social Security commissioner, Michael Astrue, says as outlined by the numbers the Social Security Administration will nevertheless be able to meet at least 75 percent of their obligations.
Too few Peters to too many Paul’s
The funding for Social Security is from tax revenue. The fewer people that are working, the fewer dollars it receives. As people live longer lives, the amount that has to be paid out increases, and therefore so do the obligations the SSA has to meet. The budget deficit that Social Security will run by the end of the year won’t affect anyone’s benefits, though, as any shortfalls do have the trust fund to fall back on.
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
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