It looks like Sen. Harry Reid (D-NV) was wrong. New congressional projects released today show Social Security’s finances are getting worse as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, in stark contrast to recent comments made by the Senate Minority Leader.
Those projections specifically show Social Security running deficits every year until its trust funds are eventually drained in about 2037.
This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut. Social Security will post nearly $600 billion in deficits over the next decade
The massive retirement program has been feeling the effects of a struggling economy for several years. The program first went into deficit last year – the first deficit since it was last overhauled in the 1980s. But CBO said last year that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016.
The outlook, however, has grown bleaker as the nation struggles to recover from its worst economic crisis since Social Security was enacted during the Great Depression. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.
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