5: SOCIAL SECURITY
Ensure that Social Security is available for future generations. Other Information:
MAKING SOCIAL SECURITY SUSTAINABLE -- Social Security is an important program that is part of the fabric of America. We must
ensure that Social Security is available for future generations. Without reform, Social Security's shortfall will grow larger
and larger until the program may simply be unable to pay full benefits to future retirees. Reforms can also be implemented
in ways that protect the most vulnerable. As the largest single program in the federal government, Social Security currently
provides retirement, disability, and survivors benefits to approximately 53 million Americans. Social Security was established
in 1935 and collects money from today's workers, and uses it to pay benefits to current retirees. The program's expenditures
in 2009 totaled $686 billion. A recent report estimates that in 2008, the Social Security program kept almost 20 million Americans
from living in poverty. However, the program now faces challenges because people are living much longer (receiving more benefits
over more years) and the elderly population is increasing due to the aging of the "baby boom" generation. In 1950, there were
more than 16 workers paying taxes to support 1 retired person; by 2040, there will only be 2 workers for each retired person.
This creates a big shortfall of money in the system. Since certain reforms enacted in 1983, the Social Security system has
generated more revenue (from the payroll tax and the taxation of benefits) each year than it has paid out in benefits. This
money was spent on other programs, and, in return, the Social Security Trust Fund received special notes from the Treasury.
According to the Social Security Trustees, the Trust Fund currently holds $2.5 trillion in these notes. In 2015, Social Security
will begin to operate with a permanent cash flow deficit. This means that the cost of providing benefits will exceed the amount
of revenue flowing into the system. The Social Security program will begin redeeming the notes held in the Trust Fund. The
Trust Fund will be exhausted in 2037, according to the Social Security Actuary. After that point, unless reforms are made,
Social Security will only be able to pay about 78 percent of currently scheduled benefits. Future solvency of Social Security
can be achieved through a change in the benefits of the program, a change in its revenues, or a combination of the two. By
acting sooner rather than later, needed reforms can be phased in more gradually, giving people time to plan for their retirement
years.
Objective(s):
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