Congressional Budget Office warns of Social Security insolvency by 2033

Congressional Budget Office warns of Social Security insolvency by 2033
10/04/2012
By Betsi Fores/Daly Caller

Social Security did not take in as much money as it spent last year, according to the latest report by the Congressional Budget Office (CBO).

The CBO estimates that over the next ten years, Social Security expenditures will continue to exceed the dedicated revenues by about10 percent as the Baby Boomers retirehttp://images.intellitxt.com/ast/adTypes/icon1.png.

“That gap will grow larger in the 2020s, and by 2030, Social Security outlays will be about 6 percent of gross domestic product and will exceed dedicated tax revenues by about 20 percent,” the CBO writes.

For fiscal year 2012, Social Security spending totaled $773 billion, nearly 5 percent of GDP.

The projected year of Social Security insolvency continues to be moved up, with the latest projections being 2033.

“Many Democrats on Capitol Hill argue that Social Security isn’t in dire shape, in part because the program holds assetshttp://images.intellitxt.com/ast/adTypes/icon1.png in special-issue U.S. Treasury securities. Still, the CBO report offers a warning for the future, noting that an aging population will put more pressure on Social Security,” the Wall Street Journal reports.

The payroll tax that pays for the entitlement program was suspended in 2010 to encourage middle-class consumer spending. It will likely be reinstated after the end of the year.

“As a result, under current law, resources available to the Social Security program will become insufficient to pay full benefits in about 20 years,” CBO projects.

“The original point of the payroll tax holiday was to stimulate consumer spending and aid middle-income households. But now Congress needs the money as it struggles with vast deficits and believes the economy can withstand the expiration,” the New York Times reports.

President Barack Obama and Republican challenge Mitt Romney have both skirted discussing details about social security reform on the campaign trail.

“Details on the candidates’ Social Security plans have fallen by the wayside as both the Obama and Romney campaigns have focused on the economy, jobs, Medicare and, as of late, foreign policyhttp://images.intellitxt.com/ast/adTypes/icon1.png,” Business Insider reports.

Senior Obama advisor David Axelrod admitted earlier on MSNBC’s Morning Joe that Obama has no plan for Social Security reform, he just insisted the approach has to be a balanced one.

“Right now Social Security cuts off at a lower point. Can you raise the cap so the upper income is paying a little more into the program? Do you adjust the growth of the program? That’s a discussion work having. But again, we have to approach it in a balanced way. We’re not going to cut our way to prosperity,” Axelrod said.

Read more: CBO warns of Social Security insolvency by 2033 | The Daily Caller


When you have 20 million people working under the table taxes don't get paid. JMO

Quote:

---

Many Democrats on Capitol Hill argue that Social Security isn’t in dire shape, in part because the program holds assetshttp://images.intellitxt.com/ast/adTypes/icon1.png in special-issue U.S. Treasury securities. Still, the CBO report offers a warning for the future, noting that an aging population will put more pressure on Social Security,” the Wall Street Journal reports.

---

BS. As far as I am concerned Social Security has been insolvent ever since the Congress decided to include Social Security taxes in the general fund. Since we have run an annual deficit every year since then (except for Clinton's 'surplus' that would not have existed without including SS taxes), I submit all SS taxes have already been spent to off-set the deficits (i.e., hide the true deficit), and that SS payments are being made using borrowed money. See quote below:

Quote:

---

As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary. Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 20 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds' securities will need to be redeemed on a large scale prior to maturity.

---

This quote is from the SS Trust Fund site.Trust Fund FAQs

OK, Social Security is solvent if you believe in the full faith and credit of the US government. 16 trillion in debt and growing. 4 straight years of 1 trillion dollar deficits each year. You bet. Sell everything you have and invest in these special securities. They are guaranteed and just as safe any bonds you can buy in Europe.

P.S. Remember, this is the same government that screwed the bond holders of a private company, General Motors. If it can do that to private bond holders, what do you think the government would be willing to do to government bond holders?