Social Security Has a Surplus Not a Deficit

Thursday, March 25, 2010

The Economic Policy Institute (EPI) has taken exception to the popular notion that Social Security is going broke. In response to a recent Associated Press story, EPI’s Monique Morrissey pointed that the Congressional Budget Office—the source for AP’s dire account—has reported the trust fund for Social Security is actually still growing. It projects the fund to increase from $2.5 trillion this year to $3.8 trillion by 2020.

 
The confusion has developed because it is true that this year, for the first time, because 8,000,000 jobs have been lost, the fund will pay out more money in benefits than it will receive in payroll taxes. However, because Social Security gains interest income from Treasury bonds, total receipts are still larger than payments.
 
Still, the negative receipts/benefits balance came six years earlier than previously predicted, which does not bode well for the long-term health of the system.
- David Wallechinsky, Noel Brinkerhoff
 
Fact Check: Has Social Security Begun Tapping Its Trust Funds? (by Monique Morrissey, Economic Policy Institute)
Social Security to Start Cashing Uncle Sam's IOUs (by Stephen Ohlemacher, Associated Press)
Social Security to See Payout Exceed Pay-In This Year (by Mary Williams Walsh, New York Times)
Combined OASDi Trust Funds (Congressional Budget Office) (pdf)

Comments

Jeff 4 years ago
The interest is just as phony as the principle. The money has already been spent on the General Fund in years past. The Government then writes an I.O.Me to itself. The Special Obligation Bonds are stored in Parkersburg W.Va. in three ring binders. There is little security as these bonds are worthless. If there is a trust fund, why will the Government have to borrow money this year to cover the shortfall in Social Security?
Mike 4 years ago
Broke? As long as people around to be taxed, it will never go broke. But where will Treasury get the money to pay the Special obligation bonds, which are just a wee bit different from (implied) real Treasury bonds?

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