CBO: Social Security to run permanent deficits

[Roland99]

Source: AP (via Yahoo)

WASHINGTON – New congressional projections show Social Security running permanent annual deficits unless lawmakers act to shore up the massive retirement and disability program.

The Congressional Budget Office said Wednesday that Social Security will pay out $45 billion more in benefits this year than it will collect in payroll taxes, further straining the nation's finances. The deficits will continue until the Social Security trust funds are eventually drained, in about 2037.

Previously, CBO said Social Security would start running permanent deficits in 2016. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.

Read more: http://news.yahoo.com/s/ap/20110126/ap_on_re_us/us_social_security

---

The 2% cut in revenue for SS isn't helping.

[damntexdem]

1. And the 'deficit' does not 'strain the nation's finances.'

It will be paid out of the SS surplus, the Trust Fund. The fact that the U.S. has spent that money is not the fault of SS. The failure to put the Trust Fund in something like Al Gore's 'lock box' is what is straining the nation's finances.

I hate it that this is laid at the door of SS when the problem is elsewhere.

[no limit]

6. That would be true if they didn't already spend the money in the trust fund

they raided the trust fund to give tax breaks to the rich and pay for 2 wars.

[Psephos]

24. True that...but the theft has been going on for decades. n/t

[unkachuck]

26. "...theft has been going on for decades."

....so, our crooked corrupt corporate politicians have been stealing our money for decades?

....who's been charged with the theft? Who's gone to prison? Who's been executed?

[Psephos]

27. I used to sit next to a kid like you in high school, but I asked to be moved...and was. :) n/t

[DirkGently]

14. Bottom line: money owed to American workers is the last priority

... falling somewhere after fur-lined battle tanks and annual beer stipends paid to oil companies.

If Americans wanted to actually receive the pensions they paid for, they should have made sure they rich enough to afford lobbyists.

[No Elephants]

30. Or, they could unite. But they--we--are too busy doing things like

working to perpetuate the existing system--and posting about it.

I'm not sure if we actually want change or want only discussion about wanting change.

When Nader was publicizing his last book on C-Span, he said citizens should band together and hire their own lobbyists.

I took that to mean even he has given up hope.

[DirkGently]

53. A Citizen's Lobby? It may come down to that. Or we could chuck lobbyists altogether ... right.

[axollot]

76. It would help if the country wasn't so polarizing towards each other. When 90%

of us are in the same, or similar boat, odds are regardless of ideology you can agree on something with the stranger next to you.

Do not want to see the US get bloody like Egypt, which is a secular movement but we seem to be a bloody people here too.

Cheers
Sandy

[Autumn]

2. So it begins

:kick:

[DJ13]

3. The point of the increased FICA was to have it in times like this

It wasnt meant to be a permanent slush fund for government expenses.

[rfranklin]

12. Actually it was meant to be a slush fund...

That was how Reagan and Greenspan covered up the huge deficits created by giving gigantic tax breaks to the wealthy.

[Fearless]

4. This is supposed to happen based on the Boomers retiring..

It will even out again in some 30-40 years. There is nothing wrong.

[Joanne98]

5. LIFT THE CAP!

[elleng]

7. IMMEDIATELY!

Idiocy if they don't do this.

[shawn703]

13. Yes and let our new citizens the corporations

Pay into SS at an uncapped rate.

[Roland99]

8. +1

[Dappleganger]

17. There's no other choice...

except to screw the poor and middle class.

Oh, wait...

[Lugnut]

19. Bingo!

It's not complicated.

[Atticus]

61. Absolutely! And I say that as one whose taxes would be increased, but the cap has never been

fair and lifting it would INSTANTLY shore up the social security program.

Note to all the "Christian" conservatives: this is what that "brother's keeper" business is about. How's that go---"Even as you have done unto the least of these, my brethren, so you have done unto me." That may not be an exact quote, but it is pretty much what Christ is quoted as saying in, I believe, the Book of Mathew.

Or do you just talk the talk?

[Jim__]

9. SS has been running a surplus for years.

The government owes the SS Fund billions that its been borrowing to run day-to-day operations. Is the government talking about renegging on any other debts? You know debts other than what it owes to the working class.

[RUMMYisFROSTED]

48. "You know debts other than what it owes to the working class."

Worth repeating.

[TheWraith]

10. There is no "2% cut in revenue."

There's a TEMPORARY 2% payroll tax reduction, which is fully paid for. Social Security loses not one dollar from that. There's a FAR bigger impact on it from the state of the economy.

[jwirr]

11. Then raise the damn caps.

[sarcasmo]

15. Those of us in our 40's and younger need to have an alternate plan.

Guess my sisters plan of working until she dies might be the road we have to take.

[shanti]

28. 40's?

i'm 55, will be 82 in 2037 when SS is supposed to run out. on second thought, i hope i'll be dead and not 82 with no income!

[sarcasmo]

50. Lucky you will be able to collect something you put into Social Security. I fully expect

if I make it to 62, no soup for me. Work till I drop.

[davekriss]

54. It doesn't "run out"

If nothing is done, social security will still be able to pay benefits at 75% once the Trust Fund is exhausted. And that assumes a future GDP growth rate of only a paltry 1.8 to 2.5%.

[amandabeech]

63. As long as SS taxes are collected, SS will be paid out to beneficiaries.

I read recently that the payout would be 75% of what has been promised. SS tax payments must be applied first to paying current benefits.

The SS Trust Fund is invested in a special series of treasury bonds. By law, SS cannot invest in anything else.

There is some question as to whether the gov's obligation to pay on the Trust Fund bonds is as certain as the gov's obligation to pay on regular treasuries.

The shortfall in current SS payments could be easily solved by increasing the cap or even by putting a SS surtax on capital gains.

Younger people may not get the best deal on SS if the situation is ignored, but younger people will not be left with nothing, even though that meme has been all over the place.

The real problem will be Medicare and Medicaid, particularly the 1/3 of Medicaid that pays for nursing homes for the very infirm and very old. That's a problem that seems to get little attention directly, although Obama's health care bill is supposed to do something to get Medicare costs under control.

[Psephos]

77. good post n/t

[Evasporque]

73. ypu got that right...nt

[niceypoo]

16. Third world, here we come

[lumberjack_jeff]

18. You keep using that word. I do not think it means what you think it means.

If you're not borrowing, you don't have a deficit.

[Faryn Balyncd]

20. AP lied: 2010- 2037 is NOT forever. We have had 70 years of SURPLUSES.

We have loaned $2.2 TRILLION to the Treasury.


S.S. is the ONLY program that has run a deficit.....All the others require Treasury subsidies EVERY YEAR.


For S.S. to run a deficit for a few decades still leaves S.S. as the most fiscally responsible federal program in the entire history of the United States.

[tomhayes]

21. To be clear on this

From now until 2037 all promised benefits would be paid out 100%.

In 2038 not all promised benefits would be paid - just what is in the funding - say 97 cents on each dollar promised. So in 2038 instead of getting a check for $1000 a month you'd get $970 a month.

WHAT'S THE PROBLEM??Oh--

The GOOBERS out here will hear "We ain't gonna get NO MONEY - why is they taking all my money now??"

[Yo_Mama]

25. You ARE SO WRONG

That's what the law says. Fine, try to collect your money from a bankrupt entity and you'll find out that the law says other people are in front of you and that you aren't getting paid.

Read at least the short version of the CBO report which is here:
http://www.cbo.gov/doc.cfm?index=12039

Note toward the end that they say that if we do as the government is now proposing, debt held by the public will reach 97% of GDP by 2021. After that we will be unlikely to be able to borrow. There is no money in the trust funds for Social Security and Medicare. For beneficiaries to get the funds allocated, the federal government has to be able to borrow that money externally to get the money to write the checks.

And after our external debt reaches 100% of GDP, our ability to borrow is about gone. Therefore, Social Security will be cut before 2025 regardless of how much theoretical money is in those trust funds.

If you want your Social Security benefits as promised, you need to agitate for an increase in Social Security taxes to cover it.

[tomhayes]

29. REally?

Who's going BANKRUPT??? Social Security? The United States government?

If it's Social Security then they'll being paying everyone at a lower rate than promised - but they won't be paying 100% to everyone until they run out of money and then if you didn't get the money you're out of luck.

If it's the entire United States government then Social Security will jsut be one of the problems.

If you're saying that the government will have cleaned out the "lock boxes" and that they'll DEFAULT on all money taken from Social Security - I say you're probably wrong about that - UNLESS the Republicans are running the policies at that point.

I just don't buy that the mild fiscal problems social security is having can't be fixe in 10 years. Or 20. Or 26.

Lift the cap. Increase taxes. Problems solved - it's easy in every way - except political.

[muriel_volestrangler]

71. No, what you say about external debt is wrong

"Note toward the end that they say that if we do as the government is now proposing, debt held by the public will reach 97% of GDP by 2021. After that we will be unlikely to be able to borrow. There is no money in the trust funds for Social Security and Medicare. For beneficiaries to get the funds allocated, the federal government has to be able to borrow that money externally to get the money to write the checks.

And after our external debt reaches 100% of GDP, our ability to borrow is about gone. Therefore, Social Security will be cut before 2025 regardless of how much theoretical money is in those trust funds."

No, there are many mistakes in what you say. There is no problem in the government borrowing when debt held by the public gets to 97%. As your link points out, it was that high during WW2 as well. And, currently, Japan has a public debt of 196% of yearly GDP (see https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html ), and functions quite happily.

Next, that does not mean "no money in the trust funds for Social Security and Medicare". The money in the trust funds would still be there, and the liability of the US government to pay interest on it, and pay it back when it matures, would still exist.

"And after our external debt reaches 100% of GDP, our ability to borrow is about gone." No, there's no reason to suggest that. First, you need to specify is you're talking about the whole country's external debt (ie the government, plus banks, plus corporations, plus individuals) or just the government. Next, you need to specify if you're talking about gross external debt (which can be huge - eg 470% of GDP for the Netherlands - but they're not in trouble, because the figure reflects huge borrowing and lending by their banks), or net external debt (for which accurate figures are hard to come by). If net government external debt grew to 100% of GDP, perhaps there'd be problems; a large chunk of government expenditure would then be paying interest abroad, and foreign debtholders might wonder if that could be kept up. But there isn't a particular reason to think that net government external debt will get to 100% of GDP anyway.

So, your conclusion that "Social Security will be cut before 2025 regardless of how much theoretical money is in those trust funds" is wrong, for several reasons.

[Statistical]

52. If no changes are made it wouldn't be 97 cents on the dollar it would be 22% reduction.

Past 2037 there is only sufficient funding for paying out 78% of promised benefits.

SS needs changes but small changes could be made now to reap huge benefits. AARP estimate rasing the cap to 90% of wages would close 40% of the gap. Raising SS tax by 0.5% would close another 23% of the gap.

[CountAllVotes]

22. End these god damned pointless wars!

and stop the killing now! The cost of this ongoing B.S. is too much and we cannot afford it now nor never!

ENOUGH!

:kick: & recommend.

[GeorgeGist]

23. Specious reasoning ...

is quite common in mediocre organizations.

[TomCADem]

31. Social Security fund now seen to be empty by 2037

Source: Associated Press

The massive retirement program has been suffering from the effects of the struggling economy for several years. It first went into deficit last year but had been projected to post surpluses for a few more years before permanently slipping into the red in 2016

This year alone, Social Security will pay out $45 billion more in retirement, disability and survivors' benefits than it collects in payroll taxes, the nonpartisan Congressional Budget Office said. That figure nearly triples — to $130 billion — when the new one-year cut in payroll taxes is included.

Congress has promised to replenish any lost revenue from the tax cut, but that's hardly good news, either, adding to the federal budget deficit. In another sobering estimate, the congressional office said government red ink this year will increase to $1.5 trillion, the most in U.S. history.

* * *
Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.

Read more: http://news.yahoo.com/s/ap/social_security

---

I think it is a bit of misnomer that social security is going to run out of money. Instead, it just means that you benefits can be cut down to 78 percent of current levels without having to increase the retirement age.

[The Magistrate]

32. Thirty Year Financial Projections, Sir, Are Mankind's Highest Comedic Form

[Lifelong Protester]

33. Boy, ain't that the truth. (I may have stated it less elegantly than

you, but I am in complete agreement.)

[Swagman]

38. yes it's basically gobeddly gook

[plumbob]

42. Yes, since their 30 DAY predictions are always filled with "surprise"

findings. Besides, in 2037, the oldest baby boomers will be 91. Dead, mostly.

[Tunkamerica]

44. Scientists predict that the first 150 yr old man has already been born.

I believe Rob Lowe is that man.

[fascisthunter]

59. they claim to know 30 years ahead but can't seem to figure out today

amazing, isn't it?

[emulatorloo]

34. Associated Press in full blown propaganda mode.

Ron Fournier trained them well.

[Kalun D]

35. No Doubt

and the abc/cbs/nbc radio news was reading from the exact same page today

"oh no SS is paying out more than it's taking in"

well yeah, now that the traitorous white house has sold out the working class and stabbed us in the back with the first step on the way to taking away one of the few good things we have left, so they can further line the pockets of the greed pig criminal banker scumbags

[msongs]

36. aka catapulting the propaganda, new administration same old government lol nt

[Fuddnik]

37. The full scale assault begins.

Preserve the Bush tax cuts.
Cut corporate taxes and taxes on dividends.
Nice little payroll tax holiday (the one that funds Social Security). How convenient.

You're getting rolled people.
Don't walk to the gallows willingly.

[Swagman]

39. stop spending money you don't have on war-stop giving huge tax cuts to people who don't need it

[woofless]

40. This is a prime example of what Late Breaking News

is not.

[No Elephants]

41. Deduct from the large salaries as you do from the smaller salaries.

Yesterday, preferably.

[PSPS]

43. This is the media setting us up for Obama's upcoming giveaway of Social Security to his rich friends

The surplus is there for a reason -- to be drawn down. The notion that it will be "empty by 2037" is nonsense. Even if it were "empty," it only needs to take in enough revenue to pay benefits. There are more beneficiaries now, and it is working as designed. The surplus it has now is intended to account for this. By 2037, there will be far fewer beneficiaries so the plan will need less income. During the next 36 years, Social Security's surplus will actually grow to double what it is now before going down. And if there really is going to be a deficit in Social Security (which, despite all these propaganda stories, is not certain at all,) it can be fixed now by raising the cap and doing away with Obama's treacherous "tax holiday."

But see this for what it is: Corporate media trying to create a panic mindset so the ultimate privatization and adoption of the catfood commission's report can be sold as "necessary." I'll bet the banksters are already picking out which islands to buy.

Obama has to go.

[dd2003]

45. sad day indeed

:(

[JDPriestly]

46. Obama should keep his campaign promise and raise

Social Security taxes on people earning over $250,000. That is all it would take. Neither those people earning over $250,000 nor our economy would miss the money. The baby boomers are just starting to go on Social Security. There are not enough jobs for seniors. Social Security doesn't just keep older people alive, it insures that younger people have opportunities.

When unemployment is high, the government should encourage older people to retire earlier. Since I retired, I spend far less money than I did when I was working. I even buy fewer shoes and stockings to say nothing of suits and other clothes. And then, when you are working you eat out a bit more often and you drive a lot more. In general, senior citizens need to spend more money on medical care and housing than do younger people, but only need to spend very less on other things.

[Lasher]

47. Authored by the same person who did the SS doom & gloom piece yesterday

Stephen Ohlemacher has a long record of hit pieces against Social Security.

[Downwinder]

49. s this an admission that the jobs are never coming back?

[joeglow3]

51. SS is supposed to be an insurance program.

Means test it.

[Igel]

57. We means-test insurance pay outs?

You mean that if I have an insurance policy and make $100k it should pay me less than if I have the same insurance policy but make only $50k?

The point is that it has been an insurance program.

[joeglow3]

66. When what you are insuring is means, they yes.

A better example would be you and me having disability policies and you collecting yours when you become disabled and me collecting mine when I stub my toe.

The point of the program was NOT to pay people when they reached a certain age. You are not "insuring" anything there - you are simply providing a retirement fund. The point of the plan is to ensure a minimum income level for everyone. Thus, in reality you are insuring those who otherwise would be living in abject poverty.

Thus, I stand by my point.

[Vinca]

55. This is such an easy fix. Take SS out of 100% of everyone's income,

not just the lower income people.

[florida08]

56. and so the fear mongering begins

as cover to privatize it. We better yell till we're blue..don't touch Social Security. We want our surplus put back.

[fascisthunter]

58. fucking liars!

we will have to take this to the streets. It's obvious this government needs to have it's ass handed to it by "We the People". A few million will take care of this issue, and the greedy wealthy bastards can start to pay down the debt, since they created it.

[lovuian]

60. So we can bailout the Banks with Trillions

but not Social Security

:argh:

[ProSense]

62. EPI disputes AP

CBO Budget Report Shows Little Change to Social Security Outlook

[4dsc]

74. This.

[yurbud]

64. what happened to the surplus they've been stockpiling?

[sofa king]

69. You mean the surplus they were stockpiling before * came along?

The answer is in the asterisk.

[yurbud]

70. Social Security had its own revenue stream and was building up a surplus to cover the

boomers when they retired.

The rest of the budget borrowed from that, so the Social Security trust fund bought T bills like any other investor. If we fail to pay those back, it will affect our credit rating.

[newspeak]

75. yeah, ya'll remember when Little Boots

publicly, more than once, joked about hitting the trifecta after 9/11? We've been raided, just like someone going into a store and mugging the clerk. And, if they get away with their oh so brilliant plan of giving it to Wall Street, then we are even more screwed. How's those pension funds doing, like those public funds invested in Enron or your 401k? Without any controls on Wallstreet, little or no regulations, we might as well as just kiss any monies good-bye. A bunch of damned corrupt sociopathic greedhead leeches!!!!

[yurbud]

65. that's a misleading headline--it's a deficit when you don't take trust fund into account

[senseandsensibility]

67. kick

eom

[Imagevision]

68. Social Security is being setup to appear to fail so they can eliminate it

[Evasporque]

72. Selfish Security...

We will pay for the aged boomers and the remaining "greatest generation" and then rest of us will get nothing.... i paid in over my working career so far enough to scratch a meager existence....very meager. It os all I have for when I retire in 20 years.

The last unarmed robbery by Wall Street and the Banks left me with little hope of building a nest egg.