Well, here’s another fun byproduct of the recession! This year, social security will pay out more in benefits than it receives in payroll taxes, “a threshold it was not expected to cross until at least 2016,” the Times says, according to the Congressional budget office. While this year’s benefits will not be altered and retirees will receive their payments as usual, experts see this as an ominous sign.
“Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances,” says the Times.
Alan Greenspan offered a decidedly bleak outlook to the Times:
“Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years,” he said.
Obama has designated a bipartisan commission to address the debt issue, including social security, and make recommendations by December 1. So, uh, does that mean we can put off worrying about the whole insolvency thing until then?
Social Security to See Payout Exceed Pay-In [NYT]