Funded by Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) Trust, estimates indicate that the Trust’s funds would be exhausted between 2037 and 2041. According to the Congressional Budget Office (CBO) numbers, from 1970 to 2009 the total expenditures increased from $18 billion to $124 billion. The year 2010 is the first year that money flowing out of the program exceeds money coming in. By 2015, tax receipts will be about 20 percent less than expenditures. Without legislative reform, scheduled tax revenues will be insufficient to pay benefits. Even after trust fund depletion, continuing tax revenue would cover about three-fourths of the scheduled benefits.
According to the U.S. Social Security Administration, Office of Retirement and Disability Policy, as of December 2008, about 51 million people received Social Security benefits. Of this number, 69 percent were retired workers and their families, 13 percent were survivors of deceased workers and 18 percent were disabled workers and their families. With a national population of over 300 million, Social Security benefits affect the livelihood of almost one-in-six Americans.
The United States Senate Committee on Aging, lead by Senator Herbert Kohl (D-WI), has made recommendations for salvaging Social Security. Kohl and others on the Committee on Aging believe that Social Security can remain solvent for future generations with a few modest tweaks. His committee recommends calls for increased worker contributions and improved tax collection of outstanding tax debts. Other options to consider are investment diversification and reduction of benefits.
The crisis in Social Security has prompted many to act. President Obama has created the National Commission on Fiscal Responsibility and Reform to address the pending crisis that impacts Social Security. By the end of the year, Obama seeks a recommendation from the Commission to present to Congress.
While lawmakers consider options for salvaging Social Security and safeguarding the Trust fund, the American people are losing faith that the program can be saved. Without reform, the financial stability of America’s aging populations will be in limbo.