Social Security Funds Projected to Fully Deplete within 25 Years
A recent report by the Social Security and Medicare Board of Trustees gave some devastating news to existing and future social security benefit recipients. Projections show that Social Security Trust Funds will reach complete depletion in 2036, leaving eligible Social Security Disability recipients without any benefits to receive. While the report was expected to deliver bad news, the projections were even worse than what most experts anticipated.
The rapidly depleting Social Security Disability Trust Funds funds are the casualty of fiscal irresponsibility in Washington; However, rather than the wrongdoers being punished, the victims will be millions of Americans who rely on Social Security benefits to survive. Government shortsightedness and a failure to properly prioritize financial responsibilities will leave many unable to afford the basic necessities in life, after these same people paid Social Security taxes for decades while they were healthy enough to work.
The Creation and Evolution of Social Security
In 1935, President Franklin Roosevelt signed the Social Security Act into law as part of 'The New Deal', a legislative effort to address the depression era's struggle with poverty and unemployment, while simultaneously addressing the increasing need to help the elderly.
Along Social Security's timeline of existence, important additions were made such as Social Security Disability Insurance and modern-day Medicare. In the early 80s, the Social Security Trust Fund was facing the threat of bankruptcy; substantial reformation was made, including a reduction in benefit payouts.
Beginning again the 90s, lawmakers, interest groups and concerned citizens once again saw that Social Security was in trouble. The crisis is still here today, as evidenced by the recent report projecting Social Security Trust Fund depletion in 2036.
Why is Social Security in Trouble?
Like any tax or welfare system, Social Security has had to experience major and minor changes since its creation in the 1930s. However, the federal government's fiscal irresponsibility is the real threat to Social Security's endangered status.
In years when the Social Security program endures a surplus (where payroll taxes exceed the amount of benefits paid out), the government has used the surplus funds for other discretionary expenditures, such as defense. When converting the Social Security tax proceeds into discretionary government expenditures, the fed simply issues an IOU for the amount. There is no guarantee that the IOUs will ever be repaid and - in fact - most believe that the government will never make good on these 'credits'.
Essentially, Social Security's threat of extinction is because the government repeatedly "borrows" money from the Social Security Trust Fund that it never has any real intention of paying back, especially in more difficult economic times such as these.
While Social Security will undoubtedly go through substantial reform in the coming years, it will certainly be around for the near future. If you are seeking Social Security Disability Insurance or Supplemental Security Income (SSI), you face a difficult road to obtaining benefits. Contact an experienced Social Security benefits advocate to help you obtain the benefits you are entitled to under law.
