The debt fallout: How Social Security went ‘cash negative’ earlier than expected

[alp227]

Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went “cash negative.”

For most of its 75-year history, the program had paid its own way through a dedicated stream of payroll taxes, even generating huge surpluses for the past two decades. But in 2010, under the strain of a recession that caused tax revenue to plummet, the cost of benefits outstripped tax collections for the first time since the early 1980s.

Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nation’s budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require another $105 billion. If the payroll tax break is expanded next year, as President Obama has proposed, Social Security will need an extra $267 billion to pay promised benefits.

(...)

Social Security is hardly the biggest drain on the budget. But unless Congress acts, its finances will continue to deteriorate as the rising tide of baby boomers begins claiming benefits. The $2.6 trillion Social Security trust fund will provide little relief. The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing.

full: http://www.washingtonpost.com/business/economy/the-debt-fallout-how-social-security-went-cash-negative-earlier-than-expected/2011/10/27/gIQACm1QTM_singlePage.html

[shraby]

1. Sniff......I smell bullsh*t

[sarcasmo]

2. Right wing hit piece.

[RC]

3. Why is there never any mention of any war?

How about receding bu$h's tax cuts?

Undo everything bu$h did. The solution is simple and the country will get back on track and the ecconomy will recover.

[cstanleytech]

5. Because the war didnt steal the money but the politicians did, its just to

bad we cant sue the politicians who made this decision and recoup the money for social security as well as the money we wasted in Iraq not to mention sue them for letting the mortgage crisis happen by destroying decades of law that might well have stopped the banks from screwing the nation.

[still_one]

4. because they stole money from the Social Security fund for bush's wars /nt

[MannyGoldstein]

6. Social Security is cash positive

The money being paid now is only part of the interest due from borrowed monies. The SS Trust Fund is still growing.

Paying back the $2.6 trillion borrowed for 2+ wars and tax cuts for the wealthiest was always understood.

[dkf]

8. Where do the funds that pay the interest come from?

[MannyGoldstein]

9. General fund. nt

[dkf]

10. Yep. And what is the state of the general fund and how much does it owe?

Here is the money quote:

"And 10 years of escalating debt have crippled the government’s ability to repay the trust fund."

[MannyGoldstein]

11. The government chose to wage 2+ wars and slash taxes on the wealthiest

That shouldn't be an excuse to economically brutalize America's seniors.

[dkf]

12. When you look at where government funds are going, a lot of it is to seniors.

Seniors get $4 in benefits for every $1 that goes to kids. It's where the money is.

http://www.cbpp.org/cms/index.cfm?fa=view&id=1258

Defense and security: In 2010, some 20 percent of the budget, or $705 billion, paid for defense and security-related international activities. The bulk of the spending in this category reflects the underlying costs of the Department of Defense and other security-related activities. The total also includes the cost of supporting operations in Iraq and Afghanistan, which totaled $170 billion in 2010.

Social Security: Another 20 percent of the budget, or $707 billion, paid for Social Security, which provided retirement benefits averaging $1,175 per month to 34.6 million retired workers in December 2010. Social Security also provided benefits to 2.9 million spouses and children of retired workers, 6.4 million surviving children and spouses of deceased workers, and 10.2 million disabled workers and their eligible dependents in December 2010.

Medicare, Medicaid, and CHIP: Three health insurance programs — Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) — together accounted for 21 percent of the budget in 2010, or $732 billion. Nearly two-thirds of this amount, or $452 billion, went to Medicare, which provides health coverage to around 47 million people who are over the age of 65 or have disabilities. The remainder of this category funds Medicaid and CHIP, which in a typical month in 2010 will provide health care or long-term care to about 60 million low-income children, parents, elderly people, and people with disabilities. Both Medicaid and CHIP require matching payments from the states.

[MannyGoldstein]

17. Social Security and Medicare are fully paid for by current and past receipts

for many years into the future.

Social Security has zero problems moving forward, aside from the attempt by the 1% to steal the $2.6 trillion (and growing) trust fund. See my sig for details.

In the case of Medicare, it is unsustainable over the long haul purely because Americans pay twice as much for medical care as do citizens of other industrialized countries (and our medical outcomes are generally no better than theirs). We need to fix health care costs, and all will be well.

[dkf]

20. It's a tax. And if payouts are adjusted it will be so that at the end of "many years"

It won't be cut by 25%.

In the end, current recipients are paid by current workers. It all goes to the carrying capacity of the workers/taxpayers.

[Laluchacontinua]

22. Seniors PAID FOR SOCIAL SECURITY AND MEDICARE. THE GOVERNMENT "GIVES" NOTHING.

SS & MEDICARE ARE FUNDED THROUGH DEDICATED PAYMENTS, not through the income tax.

Workers pay for every benefit they get & still there are those who want to steal it and claim it's welfare that the government can just take away when it suits them. And there are those who are happy to help with the theft by spreading false information.

[WranglerRog]

13. Actually the government cut everybody's taxes....

Just some a whole lot more than others. Now the only other time that I can recall in history that a government started a war and deliberately cut revenue was czarist Russia prior to World War I. Hmmmmm, now how did that work out for them????????

[MannyGoldstein]

18. That's a very interesting bit of info thanks! nt

[Enthusiast]

15. Thank you, Manny.

Ever the voice of reason.

[MannyGoldstein]

19. Hey, back at you!

:toast:

[MFrohike]

7. Correct me if I'm wrong

I noticed a passing mention of Social Security funds being used to buy Treasury bonds with no mention of the anemic interest rates currently on those bonds. While the author did bother to mention the payroll tax cuts of late, I saw no mention of the cap on the payroll tax (at least not as a means of raising funds). This is an eminently reasonable-sounding article in tone which makes me suspect it. I've seen too much garbage pushed by reasonable-sounding people the last few years.

[yurbud]

14. ''the government has borrowed every cent'' from the trust fund...so they must pay it BACK

even if it means taxing the rich.

It's ironic that there is no talk of defaulting on our other debts (except by Republicans when they want to squeeze Obama's balls), so why are they so eager to welch on their debt to retirees?

[blkmusclmachine]

16. Have some pastry:

:donut:

[PeteMac56]

21. Trust Fund

Just more emotional bait because the Right Wing A**holes know that it gets people nervous.