The payroll taxes collected no longer covers the spending. I guess SS feels they can rename it since a portion of the spending has to come from general revenues.
Social Security (SS) has released its estimates for the December data for benefits paid and taxes received.
With this info, estimates of the 2012 results become available ahead of the formal report. 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 $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. Selling additional debt to the public is the only way to cover the cash shortfall.
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.
I would like to ask someone why they don’t collect on some of the $2 Trillion plus worth of I.O.U.s that represent what the government calls the Social Security Fund. Whom can I ask?
This purchase increases the Debt. It is a liability owed to the purchaser of the security. The balance is referred to as so called “Trust Fund”.
When the payouts are more than the receipts, the shortage does not come from the general fund ; The Treasuries are “cashed” which brings down the Debt.
That's why Obama’s threat to withhold Social Security checks was one of the more egregious statements he made during the debt ceiling debacle.
The confusion comes from the fact that the “Trust Fund” has been shown at various times as an off or on budget item.
During Clinton years, it helped to make the deficit look like a surplus.
It goes on and off budget depending on the prevailing politics of the period. Only when the Trust Fund balance is down to zero, will Congress have to hit the general fund, or some other fund to continue the benefits, or do nothing and let the recipients take an immediate 25% reduction in benefits.