Social Security
Social Security refers to the federal Old-Age, Survivors, and Disability Insurance (OASDI) program passed in 1935. Social Security is a social insurance program that is primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA). Tax deposits are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund. According to the 2012 Annual Report of the Social Security Trustees, Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that this deficit will continue. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033.

Seven Hard Truths Americans Should Know About Social Security in 2021—and Five Ways to Strengthen Social Security

from Heritage Foundation,

Social Security’s projected insolvency in 2033, followed by 24 percent benefit cuts for all, means that most Americans will be affected by the program’s shortfalls. The costs of congressional inaction are exponential. At $19.8 trillion and rising, Social Security’s unfunded obligations are higher than $154,000 per household. A bigger Social Security program is not better. A more targeted program could solve Social Security’s shortfalls and increase incomes and opportunities for all.

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