Thread: Social Security's Surplus Disappearing Fast in Downturn

Social Security's Surplus Disappearing Fast in Downturn
By JUSTIN FOX
1 hr 38 mins ago

Federal-budget worrywarts (myself included) have been fretting for years about the arrival of the Dread Fiscal Year 2017, when Social Security was projected to start becoming a drag on federal finances.

Well, no need to worry about 2017 anymore. Thanks to the worst economic downturn since the 1930s, the moment of reckoning is already almost here: according to both the budget proposed by the White House in February and projections issued by the Congressional Budget Office (CBO) in March, Social Security benefits ($659 billion, according to the CBO) will exceed payroll taxes ($653 billion) in fiscal 2009 for the first time since 1984. Payroll-tax receipts generally hold up much better in recessions than do income taxes, but job losses have been so severe that the CBO expects them to decline slightly from 2008, while benefits rise almost 9% because of cost-of-living adjustments and the beginnings of the baby-boomer retirement wave. (See five reasons for economic optimism.)

If you count the $17 billion in income taxes expected to be paid on Social Security benefits, the system will still manage to provide a slight surplus for federal coffers in fiscal 2009. But from 2010 through 2012, there are small projected deficits, and after heading back into the black from 2013 to 2015, the program will then become a growing drain on federal finances, projects the CBO.

Back in 1983, when Social Security last faced deficits, Congress approved a set of Social Security reforms that included a graduated hike in the payroll tax and an increase in the retirement age. Thanks to those changes, payroll-tax receipts surpassed benefits in 1985, and the system has been operating at a surplus ever since. The money has been invested in Treasury securities that the Social Security system is supposed to live off in the future. In the meantime, it has provided a significant boost to the federal bottom line for almost 25 years. No more.

Blogger Paul Lukasiak noticed this sudden change in Social Security's fortunes back in February, and economist Kevin Hassett caught on in March, but it has otherwise attracted little notice. There's been some media coverage since then of Social Security's declining revenues, but none clearly makes the point that Social Security is about to cease playing its decades-old role as subsidizer of the rest of the Federal Government.

This is partly because officially, Social Security is still running a substantial surplus and will be throughout the next decade, according to the CBO. A key source of that surplus, though, is interest payments on federal debt held by the Social Security trust fund. It's money that Social Security has definitely earned, but it's coming out of the rest of the federal budget. Same goes for employer contributions to Social Security for federal employees, which also boost the program's bottom line but not the government's.

A better reason for the lack of attention paid to the disappearance of Social Security's surplus may be that it's starting to seem like small change. My earlier worry about 2017 was that the country was going to have to find a way - through raising taxes or cutting spending - to make up for the $100 billion or so that Social Security had been handing over to the rest of the Federal Government annually. Now, with a budget deficit projected at $1.8 trillion this year, we've got far bigger fiscal issues to worry about.

That still leaves the question of Social Security's long-term financing needs, which will be reassessed soon in the system's annual trustees' report. But a couple of years of below-expected payroll-tax receipts shouldn't dramatically change that forecast - and whatever long-run deficits the trustees project for Social Security will pale beside those expected for sister program Medicare.

http://news.yahoo.com/s/time/20090410/u ... 9189054200

I feel quite certain that I will never receive one penny from Social Security but perhaps they'll give my monies to some illegals in Mexico that claim they worked under the table in the US.

Here's part of the deal when illegals get their "fake ID packages" in order to obtain work and aren't working for cash under the table ...

http://www.nytimes.com/2005/04/05/busin ... ation.html

They pay in but, because all the stuff showing up on FICA is "faked" information, they won't be able to take out. A few years ago, I came across an article that told the story of how some people put in a request to the Social Security Administration wanting to know how much reported earnings had been filed USING THEIR SSN's but NOT NECESSARILY THEIR NAMES. Guess what? The Soc Sec Admin wouldn't RELEASE that information. It would only give them the informaiton relating to their own names coupled with their numbers. Since SSN's get "invented" somewhere, the odds are very good that my, yours and a lot of other people's numbers are being used, but paired with made-up names on faked IDs.

I get sick of all the scamming going on. The government and politicians are engaged in part of a scam with too little enforcement of our laws, the "secrecy" out of SSA in reaction to that simple request for All Earnings Info filed under a single number is a scam, the MYTH of a Social Security Trust Fund getting built up to provide for the old age of everyone paying in didn't last long, it quickly gave way to the scam of politicians raiding the Fund to "buy votes" with better benefits and going over to pay-as-you-go Ponzi scams. Ugh. A "pox" on all the scams operated by dishonest people and feckless institutions!!!