Social Security out of money, bleeding out fast

Trust fund will be “exhausted” by 2018, according to trustees; both Medicare and Social Security are “unsustainable” – actuarial report

The voice comes wavering over the crackling phone line, but the bad reception does not hide the dejection, the tone of defeat.

This is a man entering middle age who knows he's been ripped off, and he's not happy about it – just resigned to an unpleasant reality.

He's been sawed up and lumbered.

“I'm 45 years old and the only reason I'm not as P___ed off about it as someone who's 65 is I've never suffered from the delusion that the money would be there when I get ready to retire.”

The stark reality, he thinks, is that he will never get at the annuity fund into which he paid his entire working career – as much as 12.5% during times of self-employment – half that matched by equal contributions by his employers during happier times.

The trustees of the Social Security Trust Fund seem to agree.

In their actuarial report for 2010, they wrote “Social Security expenditures exceeded the program's non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years.”

Though the deficit will shrink to about $20 billion for the years 2012-2014, “after 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.”

That's when they will start selling off the farm and the tractors, cattle, and barns.

They will be able to pay off by “redeeming trust fund assets from the General Fund of the Treasury, but “Because these redemptions will be less than interest earnings, trust fund balances will continue to grow. After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year.”

After that, the trustees concluded, tax income will only cover about three-quarters of scheduled benefits through 2085.

Medicare faces a more immediate funding shortfall. It will be out of dough by the same year.

“Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.”

Says who?

Timothy F. Geithner, Secretary of the Treasury is the lead co-signer on the report. He was President and CEO of the Federal Reserve Bank of New York during the Wall Street financial crisis of 2008.

His co-signers are the Secretary of Health and Human Services, Kathleen Sebelius, Secretary of Labor Hilda L. Solis, Commissioner of Social Security Michael J. Astrue, and two trustees, Charles P. Blahouse, III, and Robert D. Reischauer..