Big job losses, early retirements and SSA finds itself suddenly paying out more in a year than it collects. Trust me folks this is just a preview of coming attractions. It’s only going to get worse as the baby boomers flood the system. And before you sneer at the boomers, know this … these are the “kids” who have been supporting SS benefits for decades as Congress (as they did last week), in an attempt to buy votes, generously raised benefits to unsupportable levels.
The deficits – $10 billion in 2010 and $9 billion in 2011 – won’t affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn’t expect the increase to be so large.
I know … you must think it’s Bush’s fault. But think back to 2004 and 2005 when George Bush begged Congress to enact Social Security reform. Personal retirement accounts for a portion of social security contributions. Congress couldn’t get the votes it needed in either the House or Senate and the Democrats cheered. Nice move.
If I were the Republicans I would be playing this a lot next year