Pundits and forecasters of doom and gloom are saying Social Security is going to run totally out of money for a while. . The tax income that the Social Security Administration takes in this year will be less than they’re due to shell out. This is not the very first time Social Security has run in the red, either. The SSA was subject of a lot of turmoil within the 1980s. The loss will be covered by the Social Security Trust Fund.
Spending will exceed income by Social Security
The Social Security Administration will take in less for this year than it is due to spend, according to the Los Angeles Times. 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 obtain by the end of 2010. After the new health care reform bill passed, Medicare was expected to stay solvent until 2029. Estimates before the bill passed gave Medicare until 2017. The projected bankruptcy of Medicare is thought to be put further off with incentives and regulations aimed at streamlining the program.
Social Security is a trust fund baby
The Social Security Administration keeps a trust fund in case of these instances. 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. This sort of instance was precisely why they have it. According to the New York Times, the Social Security Trust Fund is not in danger of running out until 2037. The Social Security Administration will nevertheless be able to make 75 percent of its payments if the numbers are accurate, as outlined by the Social Security commissioner Michael Astrue.
Who will be Peter with so many Paul’s?
The funding for Social Security is from tax revenue. If fewer individuals work, less money comes into the equation. 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. This specific Social Security shortfall won’t affect people’s benefits, but the next one might.
more information on this subject
nytimes.com/2010/08/06/us/politics/06benefits.html
latimes.com/news/nationworld/nation/wire/sc-dc-0806-social-security-20100805,0,6306255.story
