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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The Future of Social Security Looks Bleak

6/30/15
from NCPA,
6/30/15:

In 2008, the eldest members of the Baby Boom generation turned 62 and became eligible to collect early retirement benefits from Social Security. Shortly thereafter, in 2010, Social Security began running its first cash deficit since 1983, writes Peter Ferrara of the Heartland Institute. In order to cover that deficit and meet its obligations to current retirees, Social Security has been withdrawing money from the Social Security trust funds. - Under what the government's actuaries call "intermediate" economic assumptions, the trust funds will be able to cover the deficit until 2033. - After that, paying all promised Social Security benefits will require increasing the payroll tax by 50 percent. - Under what the government's actuaries call "pessimistic" economic assumptions, the Social Security trust funds will run out of money to pay promised benefits by 2029. - After that, paying all benefits promised to today's young workers will require doubling the current payroll-tax rate. According to Ferrara, personal savings, investment, and insurance accounts can solve the long-term financing crisis of Social Security without benefit cuts or tax increases. If Congress is serious about ensuring that future generations can benefit from this program, it would do well to implement these reforms. In 2005, Representative Paul Ryan and then-senator John Sununu introduced comprehensive legislation providing for a personal-account option, officially scored by the chief actuary of Social Security. An approach like what was proposed by the Ryan-Sununu bill would generate four obvious benefits, including: - After the first 15 years with the Ryan-Sununu personal accounts, workers would have accumulated $6.5 trillion in today's dollars, after adjusting for inflation. - Ryan-Sununu would eliminate the unfunded liabilities of Social Security. - Moving to personal accounts would do a great deal to promote the building of real wealth among the nation's poorer workers. - Workers would be paying the employee share of the payroll tax into personal accounts that they own and control.

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