Social Security will pay out more in benefits than it receives in payroll taxes this year, the first big milestone on the road to its eventual insolvency.
Thanks to a surge in benefits and a collapse in paychecks, this plunge into the red comes 6 years faster than the most recent CBO estimate predicted (It had been 2016).
The CBO has yet to update its estimate of the date at which the program will burn through its "surplus" and go completely bust (currently 2037), but given that the deficit arrived 6 years sooner than the estimate the CBO made only a year ago, we wouldn't be surprised to see a startling revision there, too.
This year's deficit won't hurt this year's benefits, because the $2.5 trillion surplus Social Security has accumulated since the 1980s has been lent back to the government in the form of Treasury bonds, which earn interest. And, this year, anyway, the interest payments will cover the revenue shortfall.
(Confused? You should be. Your tax dollars are paying for the interest on those Treasury bonds. So, effectively, you're already bailing out Social Security. Or your children are.).
Over the long haul, however, Social Security's financial health is headed in only one direction: Down. This will eventually force either a hike in taxes or a cut in benefits. And based on recent trends, that date may come a lot sooner than people think.
Here's an excellent graphic from the New York Times showing the difference between last year's CBO estimate and this year's. Mary Williams Walsh has a lot more background in the NYT.
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In the year 2000 a married couple filing jointly with 75K taxable income paid $15,403.50 in FIT.
In 2010 that same couple with 75K taxable income paid $11,112.50. That is a difference of $4,291.00 or a tax cut of 28%.
Same couple with 250K taxable income in 2000 paid $73,628, in 2010 paid $60281.00.
A difference of $13,347.00 or a tax cut of 22%
If you really want to soak the so-called rich then apply SS taxes to unearned income and turn it into a welfare system instead of a retirement safety net. It would complete the transformation of this Nation into an Utopian Welfare State.
Please remember after all the big fish are fished out, they will come for you
2008 102000
2009 106800
2010 106800
Was 51300 in 1990
SS is more important than war and the 91% was good enough for that - problem solved!
It will be fixed within 2 weeks.
What if we didn’t consider it as a tax Henry? But as a fine. A pecuniary punishment. Levied against this generation, for permitting the system to degenerate into the mess it has. Yes, we may leave our children with a debt. But maybe, just maybe, that burden can be compensated for by an incurred indebtedness to us. For sorting ourselves and the system out once and for all. By defining exactly what it is we are attempting to do as a species. Identifying what precisely it is that is impeding our efforts in expediting that task. And so delivering to all subsequent generations, a self-sufficient scheme through which to ensure their survival.
America can easily afford to raise taxes on the rich. And as it happens, it can't afford not to.
Not to mention... Republicans consistently have their fingers in the Social Security pot and need to repay what they've taken from it. Problem solved.
Social Security was initially set up to help fund retirement for citizens, not to pay the government's bills. We pay into Social Security separately, as opposed to income tax. During his campaign John Kerry suggested that Social Security funds be removed from the general budget and that those funds be transferred to a "Lock Box"... We should take him up on the idea and otherwise demand that public funds previously removed for purposes other than retirement be returned.
Lift the contribution cap and charge the same rate for all income - not just the first $126K.
Problem solved.
give the conservatives the Flat tax they say they want!
Wall Street and their apologist in the Repub/Demo parties are both just licking their chops to get at all that fresh Bubble Making Money.
You never hear of the waste and fraud or the Increasing Pentagon Budget. Wonder why? (Hint: Wall Street )
They'd rather let old people starve in the gutter than force some war monger business executive into getting a real job. Great way to illustrate Republican "thinking".
It's not SS fault for the borrowing, that would the republicans who drive the republic into debt.
So it's no wonder why Social Security is going broke. Take the cap off Social Security income, and the problem is solved--well, workers will still be broke, but at least they won't have to starve in the gutter during their retirement.