Social Security will will run deficits beginning this year, five years sooner than expected and will run in the red until its trust funds are drained by about 2037 according to a report from the Congressional Budget Office.
This year alone, Social Security will pay out $45 billion more in retirement, disability and survivors’ benefits than it collects in payroll taxes, the nonpartisan CBO said. That figure nearly triples to $130 billion when the new one-year cut in payroll taxes is included.
CBO estimates that, under current law, outlays for Social Security will reach $727 billion in 2011, or 4.8 percent of GDP. Over the next decade, spending for Social Security benefits will climb steadily as the nation’s elderly population grows and as average benefits rise. By 2021, CBO estimates, Social Security outlays will total $1.3 trillion, or about 5.3 percent of GDP. In that year, more than 71 million people will collect Social Security benefits.
Andrew Briggs, a former deputy commissioner at the Social Security Administration who is now a resident scholar at the American Enterprise Institute told NPR that “so long as Social Security was running surpluses, policymakers could put off the need to fix the program. Now that the system is running deficits, it simply becomes clear that we need to act on Social Security reform.”
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