Social Security in the sights

The latest in a long line of reports targeting Social Security, making a small problem seem much larger than it is, was issued today.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

That is bound to happen, especially when the economy collapses, but it is not a fatal flaw in the program — despite what conservatives may want us to believe. There are issues that need to be addressed — the retiree bubble, for instance, or that stretch of time when there will be more people taking money out than putting it in — but the fixes are not drastic. We could lift the ceiling on paying into the system, one that would add a needed level of progressivity to the system.

As for this story, can we get someone other than Alan Greenspan — whose opinions should have been discredited by the economic collapse and who is a longtime supporter of privatization — to comment on Social Security’s longterm viability?

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Author: hankkalet

Hank Kalet is a poet and freelance journalist. He is the economic needs reporter for NJ Spotlight, teaches journalism at Rutgers University and writing at Middlesex County College and Brookdale Community College. He writes a semi-monthly column for the Progressive Populist. He is a lifelong fan of the New York Mets and New York Knicks, drinks too much coffee and attends as many Bruce Springsteen concerts as his meager finances will allow. He lives in South Brunswick with his wife Annie. View all posts by hankkalet