March 31, 2009

Social Security surplus in jeopardy

Falling tax revenues in the United States have pushed the country's Social Security system into an accelerated decline, the Congressional Budget Office said.

As the unemployment rate increases, the fund's surplus is in jeopardy, The Washington Post reported Tuesday.

There are funds enough to keep benefits for nearly 51 million recipients going but lacking the convenience of the trust fund's surplus could have far-reaching implications, the Post said.

The U.S. Treasury Department routinely borrows from the surplus. But, sometime next year it will need to look to outside sources, such as China or Japan, to borrow an estimated $700 billion over the next 10 years.

In time, the Treasury will also have to start making payments on what it has borrowed over the past 25 years, the newspaper said.

It suggests we better get working on Social Security and stop burying our heads in the sand, U.S. Sen. Judd Gregg, R-N.H. said.

The Social Security trust fund, though technically in balance, is going to put huge pressures on taxpayers very soon, he told the Post.

Christian Waller, a professor of public policy at the University of Massachusetts told the newspaper the numbers would compel the government to rein in deficits.