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Posts Tagged ‘social security insolvency’

In 15 of Last 25 Months, Treasury Needed to Borrow Money to Pay Social Security Benefits

Posted by truthpills on 2010/10/26

Wednesday, October 20, 2010
By Chris Johnson

(CNSNews.com) – The U.S. Treasury has needed to borrow money to pay Social Security benefits in 15 out of the last 25 months on record because the Social Security system was in deficit in those months, with the cost of monthly benefit payments exceeding the Social Security tax revenues flowing into the Old Age, Survivors and Disability Insurance “trust funds,” according to data published by the Social Security Administration.

Because the overall federal budget was in deficit during this entire period, the surplus revenues Social Security earned in the remaining 10 months of the last 25 was used during those months to pay ongoing general government expenses and was not saved to pay future Social Security benefits.

The government gave the Social Security trust funds IOUs for this money.

Prior to August 2008, the Social Security system usually—but not always—ran monthly surpluses, and surplus Social Security taxes were always used by the government to cover deficits in the general federal budget with a promise by the Treasury to eventually pay the money back to the Social Security trust fund when the funds were needed to cover anticipated shortfalls in Social Security revenue. Surplus Social Security tax revenue was never actually set aside to cover these anticipated deficits in Social Security. It was always immediately spent.

In August, the latest month on record, the Social Security system was $8.621 billion in the red, according to the Social Security Administration. That was the fifteenth month since August 2008 in which the system posted a monthly deficit. Back in August 2008, the Social Security system dipped into deficit by $118 million.
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Social Security, Medicare Finances Worsen

Posted by truthpills on 2009/05/14

May 12, 2009 4:15 pm US/Pacific

WASHINGTON (AP) ―Social Security and Medicare are fading even faster under the weight of the recession, heading for insolvency years sooner than previously expected, the government warned Tuesday.

Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the giant trust fund will be depleted by 2037, four years sooner, trustees reported.

Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years earlier than the date projected in last year’s report.
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