For some years now, the future of the Social Security program has led taxpayers to wonder if the program can continue as originally envisioned. New worries are on the horizon, however, with the recent two-month extension of the payroll tax cuts. While it's clear that economic relief is needed by the average American, is this the best way to do it?
While the average taxpayer will see an extra annual $900 increase in their paycheck, the number that isn't being talked about is $46 billion shortfall this year for Social Security payouts. What makes the Social Security program, vulnerable, however is not the payroll tax cut program per se, but instead the supplement from general revenue funds.
Social Security was designed to be paid from payroll taxes and employers, but "for the first time in the program's history, tens of billions of dollars from the government's general pool of revenue are being funneled to the Social Security trust fund to make up for the revenue lost... Roughly $110 billion will be automatically shifted from the Treasury to the trust fund to cover this year's cut," reports the Washington Post.
This makes Social Security vulnerable is that it now becomes a program subject to cuts and adjustments just like any other government plan, such as Defense Department spending or educational initiatives or any other spending. Without special funding and the protection it affords, taxpayers of the future could all be vulnerable to a diminished Social Security nest egg.
Photo credit: alvimann from morguefile.com
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Comments: 10
I don't expect to get any Social Security, if I do, it will either be gravy or so devalued that it won't really matter. For all you older folks "that want to get what I put in", I hear you, but I won't see a dime.
Social Security has been successful for 80 years.
Ending or privatizing social security is bad management oif the country's wealth.