Social Security Funding In Question
Politicians are concerned that funding for Social Security benefits will fall short within the next 25 years. The Democrats and Republicans disagree on how best to handle the deficiency - an indication of a broader concern with the general understanding of Social Security Disability, for one thing - which could lead to a complete breakdown of the Social Security program. Newly retired enrollees would be rejected, current beneficiaries will see cuts to their monthly checks and workers and employers would see an increase to their payroll tax.
The Republican proposed budget for the Department of Defense and other government agencies includes taking funds from the Social Security Administration. Democrats are arguing that cutting SSA funds will prevent baby boomers from receiving their Social Security benefits on time.
"Social Security didn't do one single thing to create this mess," commented Representative Xavier Becerra, D-California.
Republicans have estimated the cuts at $125 million from the current levels and $500 million from the reserve fund. They claim the cuts are necessary and instead question why President Obama didn't begin reforming Social Security months ago.
Generally, the influx of baby boomers is to blame for throwing the program off balance. When this generation retires, there will be too many retirees and not enough workers to pay in. In 1950 there were 16 workers per Social Security beneficiary; by 2025 there will be only 2.3 workers per beneficiary.
The Congressional Budget Office has estimated the Social Security deficiency will reach $600 billion over the next ten years. This year, the program is projected to collect $45 billion less in payroll taxes than it will pay out in benefits.
More than 54 million Americans receive Social Security checks, 70 percent of which go to retirees and the rest to the disabled and to survivors of former recipients.
The White House's 2012 budget proposal has allotted 20 percent of funds for Social Security with $12.5 million to start reducing the backlog of disability claims.
The Congressional Budget Office has estimated the Social Security reserve fund will run out by 2037 and will have to cut benefits by 22 percent - a drastic change. Many politicians are adamant that the cuts to benefits should begin now, to spread out the loss over time, and over generations.
A report compiled by the President's non-partisan fiscal commission reads, "Unless we act, these immense demographic changes will bring the Social Security program to it's knees."
