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.
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Social Security, Medicare Outlook: Better but Still Bleak

7/31/15
from NCPA,
7/29/15:

The long-term solvency of Medicare and Social Security has improved slightly, but the imminent depletion of a fund for disabled workers highlights the risk of delays in addressing rising costs of the government programs. An annual report card Wednesday from the trustees of both programs showed: - The long-term deficits associated with the two largest benefit programs would be slightly smaller than forecast last year. - The Social Security disability-insurance program will exhaust its reserves late next year, which would trigger a 19 percent cut in benefit payments. - Around 6 percent of workers who were eligible for disability insurance claimed those benefits in 2013, up from 4 percent in 2001. - Social Security was designed as a pay-as-you-go program, but it has been paying out more in benefit dollars than it collects in tax revenue since 2010. - Excluding interest, the program ran a deficit of $74 billion last year, versus a slightly larger $76 billion deficit in the prior year. Treasury Secretary Jacob Lew said the shortfall should be addressed by Congress by reallocating the share of payroll taxes that fund the disability-insurance trust fund and the much larger retirement-benefit reserves. The reallocation would leave both funds depleted by 2034, one year later than estimated in last year's report. Wednesday's report isn't likely to alter that dynamic, but it could shape policy debates in the 2016 presidential campaign. The next president could see domestic priorities crowded out by rising spending on the benefit programs. Medicare and Social Security accounted for 42 percent of federal spending last year, up from 36 percent in 2011.

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