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It's Official: Social Security System Now in the Red

By DAVID SCHEPP Posted 5:36 PM 08/05/10

It was only a matter of time, but it's finally happened: The nation's Social Security system will pay out more than it takes in this year and next, as aging baby boomers begin entering retirement. The milestone marks the first time in nearly 30 years that the system is in the red, according to a report issued Thursday by federal officials overseeing the program.

The shortfall has been exacerbated by the recession and high employment, which have reduced payroll tax revenues. Long term, however, Social Security's finances stand to improve slightly, the trustees report said. A new tax on pricey health plans, part of recently passed health-care overhaul legislation that goes into effect in 2019, will result in more revenues.

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miriamz

Asked by miriamz at 11:49 AM on Aug. 6, 2010 in Politics & Current Events

Level 13 (994 Credits)
Answers (18)
  • Still, the plan's trust fund will be exhausted by 2037, the report said -- the same prediction it made last year. Treasury Secretary Timothy Geithner, a trustee, urged lawmakers to move quickly to resolve the problem. "Despite the projection that Social Security can continue to pay full benefits for nearly 30 years, the sooner action is taken, the more options for reform will be available, and the fairer reforms will be to our children and grandchildren," Geithner said in a statement.

    Pay outs from Social Security last exceeded income from payroll taxes in 1983, after more than a decade of a running in the red, CNNMoney.com reports. In 1977, President Jimmy Carter signed legislation increasing the withholding rate from 2% to 6.15% -- about where it is today.

    Social Security paid $675 billion in benefits to some 53 million beneficiaries last year, the reported noted.
    miriamz

    Comment by miriamz (original poster) at 11:50 AM on Aug. 6, 2010

  • The trustees report also showed the new health-care law, much of which begins taking effect in 2014, should boost the fiscal standing of Medicare, the federal health plan for seniors. The program will remain financially solvent for 12 years longer than projected a year ago -- until 2029 -- because of cost-cutting measures included in the health overhaul bill, signed into law last March by President Obama.
    ________________________

    How do you feel about this?
    miriamz

    Comment by miriamz (original poster) at 11:51 AM on Aug. 6, 2010

  • I am not surprised. If they think they are going to fix it by raising taxes they are wrong. Higher taxes mean nothing when the people aren't working to begin with. Higher taxes aren't going to solve the real problem which is lack of jobs. Raising taxes will not increase jobs, it will decrease them.
    yourspecialkid

    Answer by yourspecialkid at 11:56 AM on Aug. 6, 2010

  • The shortfall has been exacerbated by the recession and high employment, which have reduced payroll tax revenues

    Totally makes sense. If less people are working and more boomers are retiring and meeting critea for benefits, there will be a shortfall.

    It's all about the jobs.....
    Sisteract

    Answer by Sisteract at 11:57 AM on Aug. 6, 2010

  • *Tongue in Cheek*

    I don't understand why old people even get social security. They worked thier whole life...they should have saved some money. If you're disabled and can't work, that's one thing but if you've worked your whole life you should have some money in the bank.

    Just like all those lazy welfare moms wasting my hard earned tax money. Why don't they get a job like everyone else?

    UpSheRises

    Answer by UpSheRises at 11:59 AM on Aug. 6, 2010

  • And if they would stop giving money to people that have only been legals here a short time maybe all the yrs I have paid in I would get something back but I'm sure that isn't going to happen
    Moms_Angels1960

    Answer by Moms_Angels1960 at 11:59 AM on Aug. 6, 2010

  • Knew soc. sec. was going in to the red, theyve seen it coming for awhile now. I just pray that by the time i need it, its still around!!! Plan for the worst, and hope for the best!!!!
    sweetstkissez22

    Answer by sweetstkissez22 at 12:00 PM on Aug. 6, 2010

  • I'd like to know how you can be in the red and giving out more than you take in and still be able to say the fund will be depleated in 2037? The government needs to get out of the savings business and America needs to start showing some responsibility of their own. It's obvious that our government cant keep their mitts off our money like they promised so I sure don't want to be a part of any "new" program they have in mind.
    itsmesteph11

    Answer by itsmesteph11 at 12:20 PM on Aug. 6, 2010

  • It's obvious that our government cant keep their mitts off our money like they promised so I sure don't want to be a part of any "new" program they have in mind.


    How down right American.....


    I know that my recently departed ILs and my own mom appreciate(d) that small check they receive(d) each month in addition to the MC that supplements(ed) their health care. More jobs is the answer.

    Sisteract

    Answer by Sisteract at 12:51 PM on Aug. 6, 2010

  • *Tongue in Cheek*

    I don't understand why old people even get social security. They worked thier whole life...they should have saved some money. If you're disabled and can't work, that's one thing but if you've worked your whole life you should have some money in the bank.

    Just like all those lazy welfare moms wasting my hard earned tax money. Why don't they get a job like everyone else?


    Answer by UpSheRises 58 minutes ago
    Credits: 2737 Level 16
    **********************************
    LOL..I know! I worked for over 40 years....now wouldn't ya think I would have been able to set aside about a million bucks by now? LOL.
    Anyway,I did contribute to Social Security and I am getting a monthly deposit of SS benefitsin my checking account, thank goodness. At age 68, it would be ahrd to find someone to hire me if I needed a job. People seem to think anyone over 60 is about ready to croak or that they are useless. Grrrrrr
    gertie41

    Answer by gertie41 at 1:01 PM on Aug. 6, 2010

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