Topic > Social Security - 912

For the past several decades, the Social Security Administration has reported annual revenues in excess of the amount paid to beneficiaries. However, the state of the US economy has created a long-term effect in many public organizations and departments. The Social Security Administration is one of many departments that will face some economic problems during the U.S. economic recovery. Social Security will run nearly $600 billion in deficits over the next decade, as the economy struggles to recover and millions of baby boomers are on the brink of retirement, according to new congressional projections (Ohlemancher, 2011). The funds that Social Security has saved to pay its beneficiaries have an expiration date. In the coming years more and more people will be eligible for pensions, but many of them will only receive 78% of their benefits (Ohlemancher, 2011). The government must find solutions for the coming deficits and be able to help the Social Security Administration not to run out of funds. Problems In 2011, the Social Security Administration will field approximately 4.6 million retirement, survivorship and Medicare claims. 3.3 million SSI and Social Security claims and 326,000 aged SSI claims (Social Security, 2011). These claims must go through procedures that can take months to approve. During these procedures, many more claimants are eligible to claim Social Security and beneficiaries are paid a larger sum. In 2011, according to the Congressional Budget Office (Ohlemacher, 2011), Social Security will collect $45 million less in payroll than it pays out in pension, disability, and survivor benefits. 54 million people receive retirement, disability, or survivor benefits with an average payment of $1,076 per month (Ohlemacher, 2011). The Social Security Administration has managed to save and invest taxpayer money in the U.S. Treasury Department. Money saved in the U.S. Treasury Department accumulates interest for future Social Security recipients. Social Security has accumulated a $2.5 trillion surplus since the pension program was last overhauled in the 1980s (Ohlemacher, 2011). The money that Social Security has invested in the Treasury Department is not physically available to Social Security beneficiaries. The $2.5 trillion has been borrowed over the years from the federal government and spent on other programs. In a promise to repay the surpluses, the Treasury Department issued Social Security bonds, guaranteeing payments with interest (Ohlemacher, 2011). If things get worse for Social Security and it asks the federal government to pay back, there is no way Social Security will get the money because there are no federal funds to pay off debts to Social Security.