10 Things Social Security Won’t Tell You
The secret of bigger benefits, and the truth about the agency’s bottom line.
By JONNELLE MARTE
1. “Long-term deficit? We can hardly afford our bills today.”
Worried about the future of Social Security? You’re far from alone. The Social Security Administration itself has said that unless something is done to reform the system, it will burn through its funds within the next few decades. Less talked about, perhaps, is the concern about the present: the program is having a hard time paying its bills. In 2010, the Social Security Administration collected less revenue in taxes than it needed to cover its benefit payments — the first time expenditures have exceeded income since 1983. As a result, the program had to tap its $2.5 trillion trust fund, sooner than some had expected. The same is expected to happen this year. “The depth of the recession has slowed down revenues to the system,” say Eugene Steuerle, an economist with the Urban Institute, a non-partisan think tank in Washington, D.C..
A Social Security spokeswoman points out that interest income from the Treasury bonds held in the trust fund will allow it to keep growing until 2022 — even if the agency has to siphon off some money to offset any shortages in tax revenue — and won’t be exhausted until 2036, when the first Gen Xers begin retiring. But that’s already one year earlier than previous projections. After that, the agency says tax income under the current system will only cover about 75% of benefit payments through 2085.