The Truth About Social Security
Social Security has nothing to do with the federal deficit. Social Security benefits are paid out of the Social Security Trust Fund, which, according to the latest report of the Social Security Trustees, has a $2.5 trillion surplus. - Taxes paid into the Social Security Trust Fund by U.S. workers are “dedicated,” by law, to the Social Security program. The surplus that accumulates in the Trust Fund is invested in government bonds, which earn interest and help build security for seniors.
- Social Security is taking in more than It is paying out. In 2009, Social Security income was $807.5 billion while expenditures were $685.8 billion, which resulted in a net increase of $121.7 billion. The SSTF is growing and is expected to continue growing because of interest earned until 2023 when total assets will reach $4.3 trillion.
- There is no Social Security crisis. Without any adjustments to benefits or taxes, the SSTF is fully funded until 2037 at which time it is three-quarters funded into the foreseeable future.
- High paid executives pay Social Security taxes on only $106,800. Currently, only the first $106,800 of a worker’s wages/salary is taxed at 6.2% and matched by the employer’s 6.2% contribution. The 25% shortfall after 2037 can be easily resolved by raising the current cap.
- Social Security taxes are collected on only 83% of taxable payroll. At one time, 90% of all employee wages and salaries were subject to the Social Security tax. With the $106,800 cap, that has dropped to 83%.
- Powerful corporate lobbyists are behind the attack on Social Security. Lobbying groups such as the Chamber of Commerce and the National Association of Manufacturers, representing corporate conglomerates, are lobbying to reduce benefits rather than see their members pay a fair and just tax for their workers’ retirement.
- Shipping jobs overseas has reduced the amount of payroll taxed for Social Security. Front line jobs in manufacturing, telephone call services, programming, and other skilled occupations have been shipped to cheap labor markets where employers have no responsibility for Social Security taxes.
- The average American working class family needs Social Security. Life for the average American worker and their families are becoming increasingly difficult from a financial perspective. Too many pension programs have gone down the tubes. Too many workers are forced out of the labor market in their 50s. Continued globalization will only make this worse. And it will continue. Social Security is a safety net for people who dedicated their lives to their employers’ bottom lines.
