Liberals love to claim that Social Security did not cause our current federal deficit situation. While technically-correct in the past, that situation is about to change quickly and for the worse.
According to the Mercatus Center at George Mason University:
Social Security will pay out more than it takes in this year, sending out $41 billion more in benefits than it will collect. This is the first time since 1983 that benefit payouts have outstripped collections, and according to CBO data, the finances of the Social Security system are deteriorating more rapidly than even the CBO expected.
Using CBO’s last three long-term projections for Social Security, the above chart graphs the decline. CBO uses the percentage of taxable payroll left to Social Security at year’s end as the bases for its projections. The percentage of taxable payroll is an estimate of earnings subject to the payroll tax. When the percentage becomes negative, Social Security is paying out more in benefits than it collects in payroll taxes in a given year.
So, Social Security is now causing the federal deficit to increase. It is time for reform. Preferably along the lines of this idea.