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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CBO Predicts Increasing Debt As Baby-Boomers Retire

8/1/14
from NCPA,
7/25/14:

The United States' entitlement system is unsustainable, warns Senator Rob Portman (R-Ohio) at the Wall Street Journal. Indeed, a new report from the Congressional Budget Office (CBO) predicts a $40 trillion increase in debt over the next 20 years. In the CBO's "alternative" and more realistic forecast, the agency expects $10 trillion in debt over the next 10 years, followed by $100 trillion in the two decades after that. But even that forecast, writes Portman, is largely unrealistic, as it assumes that record low interest rates will continue, that Obamacare price controls will materialize and that the United States will not suffer another recession. What is responsible for the deficit growth? Spending. - Tax revenue has averaged 17.3 percent of GDP over the last half-century, a figure that the CBO expects will reach 18 percent within 10 years. - Spending, on the other hand, has averaged 20 percent of the U.S. economy over the last 50 years. The CBO expects spending to reach 34 percent of the economy over the next 30 years. Spending is rising because entitlements are rising:

- A full 10,000 baby boomers retire each day and begin collecting benefits from Social Security and Medicare. - In 1960, five workers supported every retiree's benefits. In 2030, only two workers will fund every retiree. - Due to rising health care costs, the average couple retiring in 2015 will have paid $140,000 to Medicare, yet will receive $430,000 in Medicare benefits. Social Security and health care entitlements must be reformed, writes Portman. He suggests adjusting the retirement ages, means-testing for benefits and creating a patient-centered health care system that reduces health care costs in order to make these programs sustainable.

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