In recent years, America's social security plan has been predicted to start running deficits by the end of the next decade. This 2004 publication from Cato predicted 2018. The Heritage foundation quoted the Trustees Report in 2008 that predicted 2017.
Now, Kevin Hassett of the American Enterprise Institute, summarizes in a piece at Bloomberg, the latest Congressional Budget Office Report. The Bad News: The yearly surplus effectively hits ZERO next year. He also argues that deficits will be here from now on.
We have all been so busy whining about bonuses at American International Group Inc. and arguing about the so-called card- check legislation that we forgot to watch the Social Security surplus. While we were looking away, that surplus disappeared, eight years ahead of schedule.
According to the latest Congressional Budget Office estimate, the Social Security surplus will be only $3 billion in 2010. That number is almost surely too rosy, and the actual realization next year will be a big deficit. In February, according to data from the Social Security Office of the Actuary, the program paid out more in benefits than it collected in taxes and interest combined. There will be many more months like that before we are through.
Opponents of Social Security reform have tried for years to underplay the problem by stating that the program’s finances are fine. Social Security was, in the most recent report by its trustees, expected to run surpluses all the way to 2017. Why bother to reform something now if the crisis is so far off?
Who wants to bet that the entire surplus (which is a silly notion anyway) will no longer survive until 2041 in the next Trustee Summary?