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 the Social Security Administration takes in this year could be less than they are due to shell out. It also is not the first time it’s occurred. The SSA flirted with insolvency in the early 1980s. The loss could be covered by the Social Security Trust Fund.
Spending will exceed income by Social Security
According to the Los Angeles Times, the Social Security Administration will spend more than it will earn this year. 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 collect by the end of 2010. Medicare, passage of the new health care reform bill, is expected to stay above water until 2029. Estimates before the bill passed gave Medicare until 2017. More incentives and regulations are expected to stave off Medicare’s impending demise.
Social Security can be raiding their trust fund
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. The fund itself was created for exactly this purpose. According to the New York Times, the Social Security Trust Fund is not in danger of running out until 2037. The commissioner for Social Security, Michael Astrue, has projected that if it does, the Social Security Administration will still be able to meet 75 percent of its payment obligations.
Not enough Peters to pay for Paul
Tax revenues are how Social Security is funded. If fewer people work, less money comes into the equation. As people live longer, more has to be paid out. The Social Security deficit won’t affect benefits this time.
Additional 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
