Under Obamanomics, Social Security has paid out more than it takes in for the past three years. It will soon be insolvent yet lefties do not want to restructure the program in any way, shape or form. They constantly lie about the IOUs sitting inside that fraudulent social security “lock-box” and even blocked President Bush’s reform efforts.
Social Security (SS) has released its estimates for the December data for benefits payed and taxes received. With this info, I can estimate the 2012 results that will be formally reported in five-months. It was a ho-hummer of a year for SS, it tread water vigorously, and ended up with a cash deficit of $46.7B, just a tad more red ink that 2011’s $45.6B. The pieces of the pie, and YoY comps:
Payroll tax receipts: $712.7B (+6.5%)
(Includes payment from Treasury Re the 2% tax cut)
Income from Tax on Benefits $27.1B (+15%) !!
Total Cash Receipts $739.8 (+7.0%)
Benefit Payments $780B (+6.9%)
(Includes RR interchange)
Overhead $6.7B (+4.7%)
Total cash Outlay $786B (6.8%)
Net cash flow loss $46.7B (+2.4%)
Interest income $111.4B (-1.7%)
Accounting surplus $64.7B (-2.5%)
(Paper minus cash)
Number of Beneficiaries 56.8m (+2.5%)
Some thoughts on these results:
– The $46.7B annual cash deficit is the third in a row. The 2012 shortfall confirms it; SS will never see a cash flow surplus again. Every dollar of the cash shortfall MUST be funded by selling additional debt to the public.
I hope this is clear. I’ll repeat it. Social Security is adding to the debt held by the public. It is forcing the country to borrow more to fund current operations. When Senate Democrats, like Dick Durbin and Harry Reid say, “SS does not add a penny to our debt.” – they are lying.
– The Tax on Benefits is up to a meaningful $27.1b (+15%). The increase is the result of many newly retired folks who are getting SS, and also have other income (investments and pensions). This forces them to add the SS income into their tax base. THIS IS A “MEANS TEST”.
I emphasize this fact as there is very strong opposition to the concept of a means tax for SS by Democrats in Washington and the liberal press (Dean Baker). But it already exists!
Liberals don’t like means testing because it undermines the principals of SS. It makes it appear that SS is a form of welfare. The fear is that if SS is labeled as welfare, the popularity of the program would quickly wane. So the staunchest supporters of SS are avoiding a fix that could patch the finances for the worst reasons. They are supporting Roosevelt’s dreams, at the expense of the base they say they are trying to protect. Only in America….