It has been contended that Social Security is going bankrupt. The critics could have an additional point in their favor this year. 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 is happened. The SSA was subject of a lot of turmoil in the 1980s. Social Security sustains a trust fund where it holds all funds, and shortfalls are precisely what the fund is there to attempt to counter.
Social Security payments to exceed income
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 for making to Social Security recipients than funds it is due to collect by the end of 2010. The health care reform bill will purportedly streamline Medicare, and it is expected to stay solvent until 2029. Medicare had previously been estimated to lapse into critical condition by 2017. More incentives and regulations are expected to stave off Medicare’s impending demise.
Social Security could be raiding their trust fund
The Social Security Administration maintains a trust fund for itself. The trust discover is where any cash left over after expenditures goes. In case of a shortfall, that’s what the fund is there for. The fund itself was created for exactly this purpose. The Social Security Trust Fund is projected to run out by 2037, according to the New York Times. The Social Security Administration will still be able to make 75 percent of its payments if the numbers are accurate, according to the Social Security commissioner Michael Astrue.
Too few Peters to too many Paul’s
Social Security depends on tax revenue. If less money is being earned by individuals working, less cash is accessible for the program. More cash has to be paid out as people live longer and longer lives. The spending budget deficit that Social Security will run by the end of the year won’t affect anyone’s benefits, though, as any shortfalls do have the trust fund to fall back on.
Further 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
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