WASHINGTON–New projections estimating that Social Security will begin
running large annual cash deficits shortly after the massive baby boom
generation begins retiring in 2008 should serve as a catalyst for
fundamental reform of the system, according to the bipartisan Concord
Coalition.
WASHINGTON–New projections estimating that Social Security will begin
running large annual cash deficits shortly after the massive baby boom
generation begins retiring in 2008 should serve as a catalyst for
fundamental reform of the system, according to the bipartisan Concord
Coalition.
"Today’s report of the Social Security Trustees should serve as a wake up
call for those who would like to delay reform efforts," said Concord
Executive Director Martha Phillips. "The serious problems facing Social
Security in little more than a decade deserve the immediate attention of
both policymakers and the American people."
According to Phillips, the Trustees’ estimate that Social Security’s trust
funds will be solvent until 2032 is irrelevant from an economic standpoint.
"Since the trust funds consist of nothing but stacks of Treasury IOUs,
their existence will not ease the economic burden that beneficiaries and
taxpayers will face once payroll taxes become insufficient to meet the
program’s costs in 2013," Phillips said. "At that point, Social Security’s
obligations can only be met through tax increases, benefit cuts or more
borrowing from the public, exactly the same as if the trust fund never
existed."
According to the Trustees’ latest report, Social Security’s operating
balance–the annual difference between its outlays and dedicated tax
revenues–is scheduled to begin falling in 2002 and turn into an operating
deficit in 2013. The report projects that the system’s cash deficit will
widen to an annual shortfall of $684 billion by 2030, shortly before the
trust funds go "bankrupt."
Note: The latest Social Security Trustees report is available at the
Social Security Administration’s website: http://www.ssa.gov.
