Rash of retirements pushes Social Security to brink!
WASHINGTON - February 8, 2010 - Social Security's annual surplus nearly evaporated in 2009 for the first time in 25 years as the Depression led hundreds of thousands of workers to retire early or claim disability.
The impact of the Depression is likely to hit the giant retirement system even harder this year and next. The Congressional Budget Office had projected it would operate in the red in 2010 and 2011, but a deeper economic slump could make those losses larger than anticipated.
"Things are a little bit worse than had been expected," says Stephen Goss, chief actuary for the Social Security Administration. "Clearly, we're going to be negative for a year or two."
Since 1984, Social Security has raked in more in payroll taxes than it has paid in benefits, accumulating a $2.5 trillion trust fund. But because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed.
Experts say the trend points to a more basic problem for Social Security: looming retirements by baby boomers will create annual losses beginning in 2016 or 2017.
"The moment of truth has arrived," says Rep. Paul Ryan (R-Wis.), the top Republican on the House Budget Committee. "This is a wake-up call."
The impact of the Depression is likely to hit the giant retirement system even harder this year and next. The Congressional Budget Office had projected it would operate in the red in 2010 and 2011, but a deeper economic slump could make those losses larger than anticipated.
"Things are a little bit worse than had been expected," says Stephen Goss, chief actuary for the Social Security Administration. "Clearly, we're going to be negative for a year or two."
Since 1984, Social Security has raked in more in payroll taxes than it has paid in benefits, accumulating a $2.5 trillion trust fund. But because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed.
Experts say the trend points to a more basic problem for Social Security: looming retirements by baby boomers will create annual losses beginning in 2016 or 2017.
"The moment of truth has arrived," says Rep. Paul Ryan (R-Wis.), the top Republican on the House Budget Committee. "This is a wake-up call."
