The ‘Third Rail’ Gets Derailed

January 28, 2011 05:55

The Congressional Budget Office says Social Security will begin running deficits this year and every year until it is drained in 2037. The baby boomers who used to pull the wagon are starting to ride it.

IBD Editorials


The problem with kicking the can down the road is that eventually, you run out of road. Social Security’s insolvency has been staring us in the face for a long time as politicians whistled past its fiscal graveyard. Now, with baby boomers retiring in a jobless recovery, the end is not near, it’s here.

In a report released Wednesday, the Congressional Budget Office projects that Social Security will pay out $45 billion more than it takes in this year, a figure that rises to $130 billion when the payroll tax cut is included from the Bush rate extension deal. The deficits will continue until Social Security is totally drained, around 2037.

By 2037, if nothing is done, Social Security would collect enough in payroll taxes to pay out only about 78% of promised benefits, according to the Social Security Administration.

The nonpartisan Office of the Chief Actuary for the Social Security Administration recently released its official score of the Social Security provisions of “A Roadmap for America’s Future.” They found Ryan’s plan would pay off the long-run actuarial deficit in Social Security while guaranteeing current and future retirees their full promised benefits.


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