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Author Topic: Baby Boomers laste ones to get Social Security CBO Study: Drained by 2037  (Read 253 times)

Offline NovaSkegee

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Baby Boomers will be only ones to get Social Security CBO Study: Drained by 2037

Social Security benefits can be received as early as age 62, but full retirement age is at age 65.

A baby boomer is a person who was born during the demographic Post-World War II baby boom. The United States Census Bureau considers a baby boomer to be someone born during the demographic birth boom between 1946 and 1964. Someone born in 1964 will be 73 years of age. If one were born in 1972 they can currently retire in 2037 at the age of 65.

New projection shows Social Security funds drained by 2037
The Congressional Budget Office says the system will run deficits every year until it has no money. The struggling economy and baby boomer retirements are among the factors.


Associated Press

WASHINGTON — Social Security's finances are getting worse as the economy struggles to recover and millions of baby boomers stand at the brink of retirement.

New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.

The massive retirement program has been feeling the effects of a struggling economy for several years. The program first went into deficit last year, but the CBO said at the time that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016.

The outlook, however, has grown bleaker as the nation struggles to recover from the worst economic crisis since Social Security was enacted during the Great Depression. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.

The deficits add a sense of urgency to efforts to improve Social Security's finances. For much of the past 30 years, Social Security has run big surpluses, which the government has borrowed to spend on other programs. Now that Social Security is running deficits, the federal government will have to find money elsewhere to help pay for retirement, disability and survivor benefits.

"It means that Social Security is increasingly adding to our long-term fiscal problem, and it's happening now," said Eugene Steuerle, a former Treasury official who is now a fellow at the Urban Institute think tank.

It's a bad time for the nation to be hit with more financial problems. The federal budget deficit will surge to a record $1.5 trillion flood of red ink this year, congressional budget experts estimated Wednesday, blaming the slow economic recovery and a tax cut law enacted in December.

A debt commission appointed by President Barack Obama has recommended a series of changes to improve Social Security's finances, including a gradual increase in the full retirement age, lower cost-of-living increases and a gradual increase in the threshold on the amount of income subject to the Social Security payroll tax.

Obama, however, has not embraced any of the panel's recommendations. Instead, in his State of the Union speech this week, he called for unspecified bipartisan solutions to strengthen the program while protecting current retirees, future retirees and people with disabilities.

Senate Republican leader Mitch McConnell of Kentucky said he is ready to work with Obama on Social Security and other tough issues.

"I take the president at his word when he says he's eager to cooperate with us on doing all of it," McConnell said.

Social Security experts say news of permanent deficits should be a wake-up call for action.

"So long as Social Security was running surpluses, policymakers could put off the need to fix the program," said Andrew Biggs, a former deputy commissioner at the Social Security Administration who is now a resident scholar at the American Enterprise Institute. "Now that the system is running deficits, it simply becomes clear that we need to act on Social Security reform."

More than 54 million people receive retirement, disability or survivor benefits from Social Security. Monthly payments average $1,076.

The program has been supported by a 6.2 percent payroll tax paid by both workers and employers. In December, Congress passed a one-year tax cut for workers, to 4.2 percent. The lost revenue is to be repaid to Social Security from general revenue funds, meaning it will add to the growing national debt.

Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 -- unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.

The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest.

Social Security supporters are adamant that the program will be repaid, just as the U.S. government repays others who invest in U.S. Treasury bonds.

"It's an IOU that is backed by Treasury bonds and the faith and credit of the United States government," said Sen. Bernie Sanders, I-Vt. "It is the same faith and credit that enables us to borrow from rich people and from China and from other countries. As you well know, in the history of this country, the United States has never defaulted on one penny owed to a creditor."

Offline NovaSkegee

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Age of US Senators

Frank Lautenberg New Jersey 87 years
Daniel Inouye Hawaii 86 years
Akaka, DanielDaniel Akaka Hawaii 86 years
Richard Lugar Indiana 78 years
Dianne Feinstein California  77 years
Chuck Grassley Iowa 77 years
Orrin Hatch Utah 76 years
Richard Shelby Alabama 76 years
Carl Levin Michigan  76 years
Jim Inhofe Oklahoma  76 years
Herb Kohl Wisconsin  75 years
Pat Roberts Kansas 74 years
Barbara Mikulski Maryland 74 years
John McCain Arizona  74 years
Jay Rockefeller West Virginia  73 years
Thad Cochran Mississippi  73 years
Tom Harkin Iowa  71 years
Harry Reid Nevada  71 years
Patrick Leahy Vermont  70 years
Lamar Alexander Tennessee 70 years
Barbara Boxer California  70 years
Nelson, BenBen Nelson Nebraska  69 years
Bernie Sanders Vermont  69 years
Max Baucus Montana 69 years
Mitch McConnell Kentucky  68 years
Joe Lieberman Connecticut  68 years
Jon Kyl Arizona  68 years  
Bill Nelson Florida  68 years
Jim Risch Idaho  67 years  
Dan Coats Indiana  67 years
Kay Bailey Hutchison Texas  67 years
Jeff Bingaman New Mexico  67 years
Ben Cardin Maryland  67 years
Saxby Chambliss Georgia  67 years
John Kerry Massachusetts  67 years
Mike Enzi Wyoming  66 years
Dick Durbin Illinois  66 years
JohnnyJohnny Isakson Georgia  66 years
Jim Webb Virginia  64 years
Richard Blumenthal Connecticut  64 years
Jeff Sessions Alabama 64 years
Tim Johnson South Dakota 64 years
Tom Carper Delaware 64 years
Jeanne Shaheen New Hampshire  63 years
Olympia Snowe Maine  63 years
Joe Manchin West Virginia  63 years
Kent Conrad North Dakota  62 years
Tom Coburn Oklahoma  62 years
Tom Udall New Mexico  62 years
Ron Wyden Oregon  61 years
Jack Reed Rhode Island  61 years
Roy Blunt Missouri  61 years
Debbie Stabenow Michigan  60 years
Mike Johanns Nebraska  60 years
Mark Udall Colorado  60 years
Patty Murray Washington 60 years
Chuck Schumer New York  60 years
John Boozman Arkansas  60 years
Mike Crapo Idaho  59 years
Al Franken Minnesota 59 years
Roger Wicker Mississippi  59 years
Jim DeMint South Carolina  59 years
John Cornyn Texas 58 years
John Barrasso Wyoming  58 years
Bob Corker Tennessee  58 years
Sherrod Brown Ohio 58 years
Susan Collins Maine  58 years
Kay Hagan North Carolina  57 years
Claire McCaskill Missouri  57 years
Bob Menendez New Jersey  57 years
Jerry Moran Kansas  56 years
Mark Warner Virginia  56 years
Ron Johnson Wisconsin  55 years
Lindsey Graham South Carolina  55 years
Sheldon Whitehouse Rhode Island 55 years
Mary Landrieu Louisiana  55 years
Richard Burr North Carolina  55 years
Rob Portman Ohio  55 years
Jon Tester Montana  54 years
Jeff Merkley Oregon  54 years
John Hoeven North Dakota  53 years
Lisa Murkowski Alaska  53 years
John Ensign Nevada  52 years
Maria Cantwell Washington  52 years
Scott Brown Massachusetts  51 years
Mark Kirk Illinois  51 years
Bob Casey, Jr. Pennsylvania 50 years
Amy Klobuchar Minnesota  50 years
John Thune South Dakota  50 years
David Vitter Louisiana 49 years
Pat Toomey Pennsylvania  49 years
Mark Begich Alaska  48 years
Rand Paul Kentucky  48 years 
Mark Pryor Arkansas 48 years
Chris Coons Delaware  47 years

Michael Bennet Colorado  46 years  
Kirsten Gillibrand New York  44 years
Kelly Ayotte New Hampshire 42 years
Marco Rubio Florida  39 years
Mike Lee Utah 39 years


Baby Boomer
Non-Baby Boomer
« Last Edit: January 27, 2011, 03:41:46 PM by NovaSkegee »

 

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