Currently, according to reports that I have read, Social Security is taking in more that is being paid out. Also, according to some, every Monday morning, 27% of the Social Security Trust Fund is transferred to the General Fund.
The ignorance of the American public about social security is astounding. Politicians have been demagoguing the issue while secretly manipulating the system. The social security trust fund is full of IOU's. Social security is a pay as you go system. Once the surplus becomes a deficit in 2017, the difference will have to be made up from the General Fund. Today, approximately 40% of all tax revenue comes from social security, 44% from individual income tax , and the remainder from corporate taxes and other sources.
Congress stealthily changed the age of retirement for full benefits to 67 when it used to be 65. Each year the cap of FICA wages is raised based on inflation. It is now $87,000. If something is not done about Social Security and Medicare (including the new prescription drug benefit), we will have very little discretionary (including defense) funding once you deduct entitlements and the interest on the national debt.
Greenspan is right that something needs to be done with social security. I would favor the private accounts proposed by Bush. Social security should be a safety net, as it was originally intended. The Dems love it because it makes more and more of the population dependent upon government. It is interesting that Congress does not have to contribute to social security. It has its own retirement system.