Yes, it is true that the Social Security Administration has been working with a budget surplus for the better part of the last 25 years, but that is coming to an end as the surplus is disappearing fast.
Social Security tax increases and some budget cuts allowed for the surplus from about 1990 to 2010 to make sure there were sufficient funds to pay retirement benefits to the Baby Boom generation. Unfortunately, we are rapidly moving back to Social Security being a Pay-As-You-Go system, which it was developed to be. The problem with such a system is that when you have more Americans collecting benefits than Americans paying into the system, you have a problem. This is the dilemma we face now as the Social Security Disability Insurance (SSDI) program is projected to be unable to pay full benefits out to recipients by as early as 2016.
The recent Trustees report from Social Security confirmed that the clock is ticking for both the SSDI and retirement trust funds. Things are looking a little bit better than they did a couple years ago, or even last year due to the economic recovery we’ve seen, but there’s a still work to do to save the programs that account for about 40 percent of all federal spending.
The scary part to this entire story is it really is not news. This information has been known by Social Security Trustees for years, but even though the Trustees have begged lawmakers to take action to fix the problem, it has fallen upon deaf ears.
So, here we are in the final hour of this crisis and mid-term elections are just a couple months away, but this topic is not a part of stump speeches or debates. The guess here is that once the election cycle is over, the work of saving Social Security can finally begin.
