15 February 2010

Social Security is Solid, Despite Recession

Social Security Trust Fund Analysis: Need to Look at the Long

Social Security took in only $3 billion more in taxes last year
than it paid out in benefits - a $60 billion decline from 2008,
according to federal data.

The recession is blamed in part, as it added to the hundreds
of thousands of workers retiring or claiming disability. USA
Today, using Congressional Budget Office numbers, reports that
the impact of the recession is likely to reduce Social
Security revenues again this year and next.

The slide in revenues occurred sooner than Social Security
actuaries had expected, for several reasons: Payroll tax
revenue that was growing at a 4.5% average annual clip along
with wages flattened out in 2009 because of rising unemployment
and disappearing pay raises; the number of retired workers who
began taking benefits increased by 20%; those taking disability
jumped by 10%; and monthly Social Security benefits were raised
5.8% due to a spike in energy prices the year before.

Edward F. Coyle, Executive Director of the Alliance for Retired
Americans, responded, "The overall surplus of the Social
Security Trust Fund is still $2.5 trillion; this is not a
cataclysm. We must look at the financial picture of Social
Security as actuaries do, over the long-term, which would be
over a 75-year timeline. We cannot allow privatizers to use
temporary recessions - even deep ones - to ruin the system that
has worked for millions of seniors over several decades.

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