SOCIAL SECURITY 2012 TRUST FUND REPORTApr 29th, 2012 | By Sharon Shaw Elrod MSW EdD | Category: Social Security & Medicare
Trust Fund Report for FY2011 Released
The Board of Trustees of the Social Security Fund released its annual trust fund report last week. The entire report can be read here.
SCJ summarizes the highlights here:
- “The projected point at which the combined Trust Funds will be exhausted comes in 2033 – three years sooner than projected last year. At that time, there will be sufficient non-interest income coming in to pay about 75 percent of scheduled benefits.” (www.ssa.gov Monday, April 3, 2012, Press Release)
- “The projected actuarial deficit over the 75-year long-range period is 2.67 percent of taxable payroll — 0.44 percentage point larger than in last year’s report.” (www.ssa.gov Monday, April 3, 2012, Press Release)
- “Over the 75-year period, the Trust Funds would require additional revenue equivalent to $8.6 trillion in present value dollars to pay all scheduled benefits.” (www.ssa.gov Monday, April 3, 2012, Press Release)
- Assets of the combined Social Security and Disability Trust Funds increased by $69 billion in 2011 to a total of $2.7 trillion. This means that the principal in the Trust Funds continues to increase.
- One hundred and fifty-eight (158) million people paid payroll taxes in 2011.
- “Social Security paid benefits of $725 billion in calendar year 2011. There were about 55 million beneficiaries at the end of the calendar year.” (www.ssa.gov Monday, April 3, 2012, Press Release)
- The cost of administering the Social Security and Disability programs in 2011 was a low 0.9% of total expenditures.
- The combined Trust Funds (Social Security and Disability) earned interest at the rate of 4.4% in 2011.
Can Social Security Survive?
Although the 2011 Trustees Report indicates the Trust Funds will be exhausted three years earlier than projected in last year’s report, Social Security for senior citizens and the disabled will only be in financial danger if Congress chooses to ignore the viable options for keeping it safe.
Senior Citizen Journal reported in numerous articles last year the solution to ensuring the stability of the Social Security and Disability programs. There is currently a ‘ceiling’ on taxable wages; payroll taxes stop when the ceiling is reached. In 2012, the ceiling is $110,100. Take a look at the Wikipedia example here. The heart of the issue is this:
“A person with $110,000 of gross income in 2010 incurred Social Security tax of $6,621.60 (resulting in an effective rate of approximately 6% – the rate was lower because the income was more than the 2010 “wage base”, see below), with $6,621.60 paid by the employer. A person who earned a million dollars in wages paid the same $6,621.60 in Social Security tax (resulting in an effective rate of approximately 0.66%), with similar employer matching.” (Wikipedia) (emphasis added by editor)
The answer is simple, Seniors. The payroll tax ceiling needs to be eliminated. Let’s be fair about taxes and not expect middle-class working Americans to continue to carry the tax burden. We need to elect representatives to Congress who will pledge to eliminate the payroll tax ceiling. Ask the right questions. Be sure to vote next November.