A Social Security increase was much lower than expected and some people believe it’s due to the 2013 government shutdown and the debt ceiling. But is Social Security running out of money?
As previously reported by The Inquisitr, the planned Social Security increase slowed and has hurt seniors and veterans.
One of the few Federal services not affected by the government shutdown was the delivery of Social Security checks that many rely upon to live in the United States. During the government shutdown, Social Security funds are collected through payroll taxes, which is collected by States and the IRS, both of which remained functioning even under the threat of the debt ceiling.
But as the government shutdown started the Federal government had about $30 billion in its piggy bank to work with although it continued to collect tax revenue these past two weeks. Based upon older projections, between October 22 and November 1, 2013 the Federal government won’t be able to make approximately $55 billion in payments for Social Security benefits, Medicare provider payments, active duty military pay, and military pensions. It’s possible the Social Security increase was slowed in order to push that deadline back further for the debt ceiling crisis.
Outside of the debt ceiling and today’s government shutdown, Social Security is still in trouble. The Federal program has expanded to cover a whopping seven percent of US GDP and has become a major component of the Federal budget. The only good news is that Social Security funds are supposed to be self-sustaining through FICA payroll taxes.
Unfortunately, that’s no longer the case and Social Security is running out of money slowly. For the Social Security disability fund, the program paid out over $773 billion in benefits after receiving only $725 billion, leaving a deficit of nearly $48 billion. In 2023, the CBO estimates the Social Security increase in spending will exceed $1.4 trillion compared to tax revenues of $1.3 trillion, a shortfall of about $100 billion.
Near the beginning of 2013, the CBO estimated the disability fund for Social Security was running out of money by 2016:
“The CBO projects that the DI [Disability Insurance] trust fund will be exhausted during the fiscal year 2016. Under current law the Commissioner of Social Security may not pay benefits in excess of the available balances in a trust fund, borrow money for a trust fund, or transfer money from one trust fund to another.”
Such estimates continue to come closer and closer. A Google search brings up articles from 2010 claiming we would not see Social Security running out of money by 2049 instead of the currently predict 2033. So, not only is Social Security running out of money, it’s running out of money at a greatly accelerating pace.
Are you concerned the small Social Security increase indicates the Federal government is running out of money?