Skip to comments.The debt fallout: How Social Security went ‘cash negative’ earlier than expected (Obama's Fault)
Posted on 10/31/2011 3:51:02 AM PDT by tobyhill
Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went cash negative.
For most of its 75-year history, the program had paid its own way through a dedicated stream of payroll taxes, even generating huge surpluses for the past two decades. But in 2010, under the strain of a recession that caused tax revenue to plummet, the cost of benefits outstripped tax collections for the first time since the early 1980s.
Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nations budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require an additional $105 billion. If the payroll tax break is expanded next year, as President Obama has proposed, Social Security will need an extra $267 billion to pay promised benefits.
But while talk about fixing the nations finances has grown more urgent, fixing Social Security has largely vanished from the conversation.
(Excerpt) Read more at washingtonpost.com ...
not just obama’s fault (wish it were), it is the fault going back to when they started using it to pay ANYONE who had not paid into it
President Bush actually put out a solution but was soundly rejected by the Rats, RINOs and Liberal Media. All the plan was was to allow people to take 10% of their money and put it in private investments.
This well is dry, so they continue to work hard to pass the next bottomless pit they can use for thier own enjoyment
Cain’s plan does away with the FICA tax altogether. What will that do to the Social Security cash flow?
“fixing Social Security has largely vanished from the conversation.”
When it was decided last December to CUT the revenue stream dedicated to social security, how could anyone not see that as a move to undermine the SS system itself? Here’s your change.
When did the law change where the surplus could be used for other than social security ?
I can’t remember when that law was passed. Anyone know when congress modified such ?
Agree SF..... Its general use versus specific for elderly is the basis for this problem IMO.
LBJ, I think. (You knew that the answer would be a Dim, didn't you.)
LBJ needed money for the Vietnam War
It is the piggy bank politicians systematically raided to make good on campaign promises.
They made whores of themselves for decades and NOW ask us to stop being greedy and learn to make sacrifices!!!
F&^K ALL these politicians!
I haven’t read his proposal completely, but from what I have read I think he looks at the problem like this: we are paying for it out of general funds anyway, so we just cut the crap and treat it that way.
Removing 2% of FICA taxes from those who were still employed did this.
Dirty Harry Reid campaigned in 2010 against Sharron Angle who stated that SS was almost broke.
Dirty Harry kept saying that there was no problem with SS until about 2035 & then ‘It would need some tweaking’ & not more than that.
NObama knew this would be the result of his ‘giveback’ on SS to those who were still working.
What also wasn’t told was that when these same workers do retire- their retirement benefits will be reduced because of their lower investments in same.
Taking the money out of SS was originally proposed in a bill by NY senator Patrick Moynihan. Years later while campaigning he complained about the same bill he originally sponsored. I know since a college professor tried to fail me in history when I pointed out the hypocrisy of Moynihan while he was trying to campaign for him during class.
I cant remember when that law was passed. Anyone know when congress modified such ?
It was a planted axiom in the requirement that the Social Security Trust Fund be "invested" in "safe" government bonds.
Think about it: that requirement is nothing other than a requirement that the government borrow the money. And having borrowed it, the government (in the nature of things, only to be expected) spent it. Like drunken sailors (only - as the stock "joke" points out - at least drunken sailors spend their own money).The result is that the SSTF holds vast sums of "money" in the form of Treasury debt. But, as Obama pointed out during the runup to the debt ceiling crisis a few months ago, the Treasury doesn't have the money to pay out Social Security payments without borrowing the money.
IOW, the fact that the Treasury owes the Social Security Administration all the "money" in the SSTF reveals the SSTF to be an accounting gimmick rather than a serious source of funding for the Social Security Administration. About as actuarially sound as Bernie Madoff's "super deal" investment scheme . . .
Whenever anyone makes reference to the "soundness" of SS into the 2030s based on the SSTF, just remember that the SSTF is an asset to the Social Security Administration but an equal liability to the Treasury. Net-net, its value to the government is zero. So much has been apparent to anyone who looked seriously at the SSTF, going back decades. But, of course, to say so out loud was, before the 21st Century, to "touch the third rail of American politics." Our friends the "objective" journalists made sure of that!
Very grateful for the explaination ......thank you.
Wow..... Thanks for the info.
Stay safe ...
All the way back then ?
Yeah I suspected rats albeit these days rinos can crap on us just as fast...