Social Security fund slides into permanent deficit

[dkf]

WASHINGTON — Social Security's finances are getting worse as the economy struggles to recover and millions of baby boomers stand at the brink of retirement.

New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.

The massive retirement program has been feeling the effects of a struggling economy for several years. The program first went into deficit last year — the first deficit since it was last overhauled in the 1980s. But CBO said last year that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016.

The outlook, however, has grown bleaker as the nation struggles to recover from its worst economic crisis since Social Security was enacted during the Great Depression. 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.

http://www.staradvertiser.com/news/breaking/Social_Security_fund_slides_into_permanent_deficit_.html

[Sal Minella]

1. Did the Koch boys just stand on a street corner somewhere

handing out hundred-dollar bills to anyone who promised to post this sh*t on DU?

How many times today do I have to "ignore" this stupid falsehood?????????

[Angry Dragon]

12. +1000

[pinboy3niner]

24. +2000

[Starry Messenger]

25. +3000

[JuniperLea]

27. +4000

[FreakinDJ]

35. DING DING DING - We have a Winner Folks

[KansDem]

42. uh...where is this street corner?

:hide:

[QC]

56. Bingo!

[pinboy3niner]

59. And the usual suspects get 'first dibs.' nt

[SammyWinstonJack]

69. +5000!

[Vincardog]

2. If this is a problem why not just eliminate the cap?

[Sal Minella]

7. I think they're all operating on the "Repeating a lie until it becomes

accepted as Truth" concept here -- we are being bombarded with this "story" today.

[Cleita]

33. That's exactly what they are doing.

They did it for years about health care, out and out lying about Canadians coming by the busload to get health care here, and it was effective until now.

[Telly Savalas]

76. There's nothing in the OP that's a lie.

The fact that's being repeated is that actuarial projections show that at current benefit levels with the current revenue structure Social Security will be insolvent in a few decades. Certainly people who try to spin this fact into a doom and gloom situation are idiots, but so are people who pretend it doesn't exist.

You either let it go insolvent, cut benefits, or make some tweaks to the revenue side. Pretty much everyone at DU supports the last option, and from the State of the Union it sounds like the president agrees. With a GOP controlled House I doubt we'll get anywhere in the next couple of years, but we have time so panic isn't necessary.

[DJ13]

8. And lose a necessary lie so they can slash SS?

Not going to happen.

That would be the easy way out, but the government doesnt want to repay the trust fund so they wont mention that sensible idea.

[FreakinDJ]

37. Elimentate the Cap and Recind the Tax Cuts for Top 2%

and there is no problem



"C-ya at the Debates Bitches" - Paris Hilton

[dkf]

66. I say eliminate the cap and means test it.

But I'm skeptical about overfunding as it doesn't do much if not held in real assets that can be sold vs funds paid from one debt ridden pocket to the other.

[Sherman A1]

3. Is this that stupid AP story?

:banghead:

[grahamhgreen]

4. It's not in deficit UNTIL the the trust funds are drained, if ever.

The trust fund was set up specifically to provide for baby boomers only. It is intended to run on a cash in cash out basis.

The trust fund was created by double taxing boomers.

[inna]

5. oh no, not again.

:crazy:

[mmonk]

6. What happened to the trust fund surplus?

[Sal Minella]

9. The wingnuts noticed it's still there, and want it to go to Wall Street.

That's what happened.

[grahamhgreen]

10. The trust fund is the surplus!

[dkf]

14. It's funny how we had a surplus during the Clinton years using the SS funds

But we don't increase the deficit when social security pays out more than it receives.

[CreekDog]

46. why is that funny?

do you understand how SS works and how population changes affect its cash flow?

[dkf]

67. Because when it pays extra the budget can be in surplus but when it pays out it doesn't affect the

Deficit.

You don't get my point?

[CreekDog]

11. You're on a roll lately

last three OP's:

social security is broke
gov't has too much regulation to start a business
question about taxes and redistribution for people who don't do anything

and before that:

supporting Arizona's immigration law.

:shrug:

[dkf]

15. I am freaking out at the reality of our situation

Can't you tell?

[CreekDog]

18. i think you're posting before you understand the situation

:hi:

[pinboy3niner]

26. What else is new?

:hi:

[dkf]

32. What is there to understand? If the surplus truly existed and we were drawing it down

We would be fine. But now we've got an IOU we have to collect from the taxpayer when the general budget also needs to be collected on.

How is this not a mess?

[CreekDog]

34. well the rest of the government has a deficit --why aren't you freaking out about that?

and has run one almost continuously for as long as we can all remember.

since that deficit began decades ago (at least).

[dkf]

45. I am! Looking at all this is giving me anxiety.

Last time I felt like this was when I realized George Bush might win. Seriously.

My doom and gloom meter jumped up a few times too...when I realized we were probably running out of oil, when I realized how leveraged hedged funds were, and when I realized what crazy mortgages they had been executing. Option arms are the most ridiculous thing ever.

[CreekDog]

50. then why the singular worry over the SS deficit?

and not the overall deficit?

[bettyellen]

53. because its the RW talking point of the day- again!

[dkf]

64. Here is my post on the overall deficit.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=266777&mesg_id=266777

The 2010 numbers look better because of Obama's HCR but it's still bad. And they don't break it down the way they did in 2007, no interest included in the updated chart.

[CreekDog]

55. Wait, it doesn't make sense --you don't believe a single word anyone says to you here

but you believe one article that's been heavily criticized as slanted and unreliable.

what are your standards that you won't consider dozens of opinions that all support each other, but will support one that's been widely discussed as having weaknesses and inaccuracies.

do you do any critical analysis? or do you just decide what to believe based on your own biases?

[pinboy3niner]

63. Excellent point!

And despite the fact that we have covered the same ground over and over in response to these OPs, the same crap just keeps getting re-posted as if it's suddenly a NEW "concern." It strikes me as pretty formulaic--glom onto a new news hook and express "concern"--while conveniently ignoring all the ACCURATE information provided in past threads.

And so it goes...lather, rinse, repeat...

[dkf]

65. Because the numbers don't add up.

I just don't think it is feasible to think we can cover all this. Did you see the projected deficit? 1.5 trillion? And yet freezing discretionary spending for 5 years saves $600 billion only? And taxing the top earners over 10 years is worth $700 billion? Are you kidding me? 5 years of frozen spending and 10 years of taxing the rich doesn't even fix one years deficit?

[CreekDog]

77. if you cared so much about SS and the deficit then...

why were you wasting valuable time here strenuously defending Arizona's immigration bill last year?

[dkf]

78. I think illegal immigration and even some legal immigration drives down wages.

What supports wages is full employment.

[Cleita]

31. Why are you looking at right wing sources? There is

no reality there. From the trustee's report on the Social Security official web site. FAQ http://www.ssa.gov/oact/progdata/fundFAQ.html#n1

In the annual Trustees Report, projections are made under three alternative sets of economic and demographic assumptions. Under one of these sets (labeled "Low Cost") the trust funds remain solvent for the next 75 years. Under the other two sets (the "Intermediate" and "High Cost"), the trust funds become depleted within the next 30 years. The intermediate assumptions reflect the Trustees' best estimate of future experience.
The Trustees believe that extensive public discussion and analysis of the long-range financing problems of the Social Security program are essential in developing broad support for changes to restore the long-range balance of the program.

Here is a summary of the most recent report.

http://www.ssa.gov/oact/TRSUM/index.html

[dkf]

39. I believe the surplus was spent out from under us.

And we've been ripped off.

I can't get over that.

[CreekDog]

47. you "believe"? is this some sort of religious faith?

because you don't seem to have any knowledge of how the program works and are substituting what appears to be a conspiracy theory to explain things that are easily explained by actual trends and happenings in the program.

[Cleita]

60. The surplus was in the general fund. It has nothing

to do with the Social Security trust fund.

[dkf]

70. During the Clinton years we had a surplus because we were taking in more SS taxes

Than we were paying out in SS benefits. If they didn't count that, we didn't have a surplus.

[Cleita]

72. Boy you just can't look at reality can you.

The social security fund still has a surplus. It has nothing to do with the general fund.

[dkf]

74. The social security tax surplus goes into the general fund and the SS fund gets an IOU

[Cleita]

75. BS. Treasury bonds are what SS invests in among other investments. The

Treasury has to pay them back when they are due with interest something they have not failed to do. The only way SS will be in danger if the country becomes bankrupt and that won't happen while we have a Democratic President or even a Republican one. This is why the Republicans are spreading astroturf to scare Americans like you into believing the fund is in danger so that they can pass laws privatizing it. You are a fool if you fall for it and a tool if you are deliberately promoting it.

[Forkboy]

16. The OP never met a right wing angle he didn't like.

[jonnyblitz]

38. it's a "she". nt

[neverforget]

41. you got that right

[QC]

58. It's almost like there's some sort of pattern here. n/t

[Better Believe It]

13. They are reaching into their 2.5 trillion dollar surplus to pay benefits until 2037

And buried at the end of the article after the scare healine the writer points out:

"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.

[dkf]

19. Except we spent it already.

God it makes me ill to think of what we've done.

[Hannah Bell]

44. you've been corrected on the facts many times & just keep on posting the bullshit

[DireStrike]

52. That isn't true.

[tortoise1956]

62. Actually, that statement is correct...

What is currently referred to as the "Social Security Trust fund" consists of special bonds that are only available to the trust fund. While they do draw interest, that interest is paid by the U.S. Treasury. The money itself goes directly into the general fund, and is used for government expenditures. When the money collected by SSA is less than that paid out in benefits, the bonds will be redeemed by the U.S. Treasury.

Here is a link to Social security FAQ's, if anyone is interested:

http://www.ssa.gov/OACT/ProgData/fundFAQ.html

And another link describing how the government set up the mechanism to transfer the money to the general fund (it happened in 1968, BTW):

http://www.network-democracy.org/social-security/ff/faq/trust.html

So, what the government has done is create a fund that consists of bonds that were traded for money collected from FICA contributions, so that it could use the money on other things. There is no money in the account, just a big IOU that will have to be paid off by the Treasury - which means us taxpayers.

[CreekDog]

54. what do you think we spent it on?

:eyes:

[Recursion]

17. Well, no, it's just that it's going to start adding to the general fund's deficit

Or require an increase in taxation to realize its surplus. The trust fund itself is in great shape, it's just that we now have to pay for it.

[dkf]

30. Yeah we have to pay for it instead of using it as a cash cow.

It's like where you were getting income, you now have a bill. Like when your tenant that used to pay you rental income vacates and now you have to pay the mortgage.

[whatchamacallit]

20. If the president said we need to start eating barbecued children

some folks would be posting positive nutritional charts.

[Forkboy]

21. ...

:spray:

[pinboy3niner]

28. *SPRAY*

:rofl: :toast:

[Brickbat]

43. That is the damn truth right there. They'd post blue links to recipes, too.

[Hannah Bell]

57. they'd be saying, well, it's of course a terrible thing that we need to barbecue children,

but perhaps we don't need to barbecue quite so many as they say?

perhaps we can give them "compassionate" drugs before we put them into the barbecue?

that's liberal reform. lol.

[pa28]

61. We'd need to have an adult conversation about which sauce to use.

The barbecue itself would not be a valid issue for discussion.

[QC]

71. Oh please. He advocated infant-consumption since the start of the primaries.

It's not his fault that you weren't paying attention.

[JVS]

73. Think of the decreased carbon footprint!

[Cleita]

22. That author Stephen Ohlemacher of the Associated Press

seems to have a lot of articles out there with a conservative POV. A quick google shows articles by him where he quotes the Heritage Foundation as his source.

This is pure bunk.

[A-Schwarzenegger]

23. Somebody's sliding into something all right

or already slud.

[old mark]

29. OP is total RW bullshit, The cap must be lifted - but even if it is not, SS is solvent

till the mid 2030's.

Please see and sign the petition to life the cap here:


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x286866


thank you.


mark

[Dappleganger]

36. That's it.

Welcome to iggy.

[spanone]

40. according to the republicans social security has been going under since it's inception

bullmalarkey

[OHdem10]

48. Get A GRIP. There was a Person with Actuarial KNOWLEDGE

on Fox News(of all places) who put knife right
through this garbage.

Right now, this minute, SS can continue without problems
until 2037. He said, "Cavuto if any Business could make
this prediction regarding their company they would be
in very good shape."

Furthermore, after 2037 if absolutely nothing is done
the SS recipients would receive a monthly check in the
amount of 75% of the full amount. In other words money
will be there, the payout would have to drop by 25%. Getting
75% is more than the BIG LIE. SS will be broke. End this
lie, please.

[COLGATE4]

49. Pure, unadulterated RW bullshit.

[DireStrike]

51. I suggest you find different news sources

You seem to be getting a LOT of bad information. Are you maybe living in a particularly right-wing area?

[RedCloud]

68. Solvent out the wazoo. jail time mandatory for panic spreaders who knowingly do it.

They are out to con you Big Time.