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Politics : The Castle -- Ignore unavailable to you. Want to Upgrade?

To: MSI who wrote (344)	11/12/2002 2:40:24 PM
From: Neocon	Read Replies (2) \| Respond to of 7936

Trustees Say Social Security Unfunded Liability Tops $25 Trillion April 1, 2002 The latest Social Security Trustees Report shows mixed results for the nation's troubled public pension system: stronger fiscal health in the short term relative to last year's projections, but larger deficits over the long term. While the program will retain positive cash flow for an additional year, with payroll taxes sufficient to pay full benefits until 2017, and the trust fund scheduled to remain solvent until 2041 rather than 2038, over the long term the program's deficits top $25 trillion (in today's dollars), the highest level ever. Relative to recent Trustees reports, two important dates for the program have moved back. The date of payroll tax deficits, after which the government as a whole must produce additional funds in order to pay full promised benefits, moved back from 2016 to 2017. Moreover, the payroll tax surpluses generated between today and 2017 are larger, leaving more funds available for Social Security reform – if those surpluses are truly saved. The date of trust fund insolvency, which signifies that Social Security would no longer have legal claim on the additional federal revenues needed to meet benefit obligations, moved from 2038 to 2041. It is worth noting that these extra years of trust fund solvency do nothing to alleviate the burden of actually paying Social Security benefits. For instance, in last year's Trustees report, Social Security's payroll tax deficit in the year 2039 was $343 billion (in today's dollars). Because 2039 was beyond the trust fund's insolvency date of 2038, this deficit was treated as a significant problem to overcome. In this year's report, Social Security's trust fund is projected to remain solvent until 2041, so cash deficits prior to that date are ignore by many opponents of reform. However, the payroll tax shortfall in 2039 is now projected to be $353 billion, $10 billion larger than in last year's projections. The simple truth is that if full benefits are to be paid, the government must make up Social Security's payroll tax shortfalls regardless of whether there are bonds in the trust fund. The fund's bonds constitute a claim on general government funds, but they do not constitute those funds themselves. Hence, what matters is the size of the program's cash shortfalls, not the size of the trust fund. And those shortfallf have grown in this year's report, topping $25 trillion between the payroll tax insolvency date of 2017 and the end of the actuarial scoring period in 2076. In last year's report those deficits were projected at just @22.8 trillion, and in the 1999 and 2000 reports Social Securities shortfalls were $20.1 and $22.2 trillion respectively. From the point of view of the government as a whole, and from the point of view of the taxpayer who must ultimately pay the bills for Social Security, the problem has grown worse, not better. All told, the 2002 trustees report presents an opportunity and a challenge. As the program's short-term payroll tax surpluses will increase, the opportunity to save those surpluses by funding personal accounts is greater than ever. However, Social Security's long-term challnges grow greater, meaning that today's opportunity to reform the program should not be missed. socialsecurity.org Sounds to me like they make the requisite liability calculations.