By NCPSSM April 1, 2009
Let’s start off by stating the obvious…unless you’re an economist or policy analyst, the details of Social Security’s funding mechanisms, trust fund operations (OASI & DI) and projection methodology for both, are far beyond what the average American knows (or even cares to know) about the program. Unfortunately, this is exactly why it’s so easy for those who want to see the program dismantled to continue their “Social Security is bankrupt” memo, regardless of the facts.
The latest headlines claim Social Security is running out of money to pay benefits because of the recession. This is based on CBO’s forecast included as part of its final budget projections and economic outlook. The headlines screamed: “Slowdown Slashes Social Security Surplus” and “Recession Puts a Major Strain on Social Security Trust Fund”.
Thankfully, the Associated Press provided a more thorough description of what’s actually happening. Here’s a brief summary of our full analysis now available on the National Committee website:
Social Security’s trust fund surplus is NOT disappearing.
What is happening is that the annual surpluses collected each year, which have been building up our current $2.5 trillion trust fund for decades, are below what was projected prior to the downturn in the economy. Less employed=fewer payroll taxes=lower annual surplus of contributions over expenditures. As our President Barbara Kennelly told Nightly Business Report this has nothing to do with the total assets/surplus still held in the Social Security Trust Fund: