Prospects Grim as Social Security Faces Deficits; CBO Says Trust Funds Will Go Bust without Adjustments

Article excerpt

Byline: Stephen Dinan, THE WASHINGTON TIMES

Social Security is facing an ever-gloomier picture, having run a deficit of 4 percent last year and facing deeper deficits in the next 10 years, according to a Congressional Budget Office analysis Tuesday.

The report also said the combined Social Security trust funds, which cover both seniors' benefits and disability payments, will go bust in 2034, meaning payments will have to be trimmed for future retirees.

Under current law, resources available to the Social Security program will become insufficient to pay full benefits in about 20 years, the analysts said.

Those born in the 1980s would only see about $19,000 a year after being slated to average about $22,000 a year in benefits when they retire in the middle of this century.

Those born last decade face an even bigger shortfall: They should have averaged $30,000 in their first year but will likely only get $23,000, the CBO said.

That works out to just 34 percent of a worker's annual salary averaged across his or her lifetime.

The deficit projections are slightly worse than the CBO calculated just a year ago, with the agency saying long-term cost projections are rising faster than they had foreseen.

The CBO said Social Security ran in the red in 2010 and that deficit only deepened in 2011, with revenues covering only 96 percent of outlays. Those were the first two years the system has had a deficit since the 1983 deal to save the program.

Going forward, deficits are a fact of life, the agency said. The deficit will average 10 percent in the next decade, and will top 20 percent by 2030. …