February 5, 2010

How to handle gov't squandering Social Security surplus?

Posted: 03:51 PM ET
FROM CNN's Jack Cafferty:

First it was the banks and car companies... and now it looks like Social Security is the next in line for a taxpayer bailout.

Fortune Magazine's Allan Sloan writes that for the first time in 25 years - Social Security is taking in less than it's spending on benefits.

That's because For decades - the government has been using the surpluses from the nation's largest social program to pay for other things; and now Social Security is running out of money and pretty much consists of IOUs.

Sloan points out that no one has officially announced that Social Security will be cash-negative this year; but it becomes clear pretty quickly when looking at a report from the Congressional Budget Office.

This is outrageous - another bailout looming on the horizon because the government mismanaged these surpluses. And because there's no surplus, there's no interest income - tens of billions of dollars that are nothing more than a bookkeeping entry because the cash, which would earn that interest, is gone. replaced by IOUs.

Things haven't been so bleak for the government trust fund since the early 80s - when it came very close to running out of money. Back then, the government wound up trimming benefits and raising taxes - which led to the significant cash surpluses.

Meanwhile Social Security already provides more than half the income for most retirees; and with millions of people seeing their home values and stock portfolios slashed, this probably means they'll become even more dependent on social security in the future.

Here’s my question to you: What should be done about the government squandering the Social Security surplus?

http://caffertyfile.blogs.cnn.com/2010/ ... us/?hpt=T2