Social Security has been running in the red for several years and will see a 12 percent gap between the taxes it’s collecting and the benefits it’s projected to pay out over the next 10 years, according to a report Tuesday from the Congressional Budget Office.
And the problem will only get worse as the years go on, CBO said.
“As more members of the baby-boom generation retire, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the gap will grow larger in the 2020s and will exceed 30 percent of revenues by 2030,” the non-partisan agency said in its report.
The warning comes as Congress is poised to pass a budget deal this week that increases spending without making any changes to control Social Security or other entitlement benefit growth — something critics said amounts to a missed opportunity.
Despite running a cash-flow deficit, Social Security will legally be able to pay out full benefits over the next decade because it will tap into its two trust funds. Those funds have been filled by surplus taxes over the past three decades, though the money has generally been borrowed to pay for other government spending and lawmakers say it’s really filled with the equivalent of IOUs.
President Obama has floated a potential change to the way Social Security benefit increases are calculated that would mean slower growth in spending. But he has not put any legislative muscle behind that proposal.
Instead, some Democrats and liberal pressure groups are calling for him to go the other direction and expand Social Security benefits, arguing that poor seniors and disabled individuals are falling further behind the wealthy.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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