MAINTAINING SOCIAL SECURITY

“Social Security is not in that bad of shape and this has been consistent for a long time now.”

Social Security this year will pay its 52.5 million recipients some $41 billion more than it takes in via payroll taxes, which have been eroded by several years of high unemployment rates. The deficit is due in part to an accounting adjustment, but a $7 billion shortfall also is expected in 2011.

The fund that covers retiree and survivor benefits—which were paid to nearly 43 million people by the end of 2009—is running a surplus. But the disability pool, which provided benefits for 9.7 million recipients last year, is on track to exhaust its own assets by 2018. Disability payouts still can be fully covered through 2037, trustees said, if lawmakers allow the retirement and survivor trust funds to be tapped.
In 2018, when the new health care law calls for taxes on “Cadillac” insurance plans, employers are expected to reduce those high-cost health benefits in favor of paying higher wages. The anticipated payroll taxes on that extra income is expected to ease Social Security deficits.
Overall, the Social Security trust fund will continue to grow because of interest income, and payouts won’t begin whittling away at assets until 2025. Under current funding methods, 75 percent of benefits could be paid out through 2084.
Small changes would work

A variety of proposed solutions could prevent benefit cuts, from hiking the retirement age to raising payroll taxes. According to the actuarial figures released today, for example, Social Security retirement, survivor and disability payments could be stabilized for 75 years by adding another 1.92 percent to the existing 12.4 percent payroll tax
“You could easily pull it all together with a few very small changes“They may be changes people don’t like, but they aren’t dramatic and they’d prevent a 25 percent cut in benefits after 2037.”
According to a Gallup poll released in July, 67 percent of Americans surveyed preferred that payroll taxes be applied to all income, instead of just the first $106,800 as it is now
“The trustees confirm that Social Security can pay full benefits for decades, and approximately 75 percent into the future even if nothing is done