Only $57 Billion in Surplus Forecast for 2010, But $80.8 Billion Needed for Stimulus Plan’s Payroll Credit
The Congressional economic stimulus plan would place the Social Security Trust Fund into deficit for the first time ever next year, if the current economic stimulus package is passed by both Houses of Congress.
Social Security is funded by payroll taxes that employees and their employers pay into the system. Money that comes into the Social Security Trust Fund is used to pay the Social Security checks retirees receive each month, and since the creation of the Trust Fund in 1983, the program has always had more money coming in than going out.
However, that may change as soon as next year, due to a proposed refundable payroll tax credit which would offer workers a refund on their portion of Social Security taxes, meaning there would be insufficient cash to pay benefits. The $145.3 billion refundable payroll tax credit proposal would give individual workers up to $500 and couples up to $1,000.
According to the 2008 Social Security Trustees Report, the estimated surplus under “high cost,” or bad economic conditions, is as follows:
Social Security Trust Fund Projected Surplus (Billions)
*Payroll Credit Costs, Proposed Legislation (Billions)
2009: $54; $24
2010: $57; $80.8
2011: $43; $37
* Source: Joint Committee on Taxation
“A sufficiently funded Social Security Trust Fund is critical in ensuring that seniors don’t have to endure benefits cuts,” said Daniel O’Connell, chairman of The Senior Citizens League. “Although we recognize the economy is in bad shape, we don’t think putting the Trust Fund into the red is a responsible response.”
The Senior Citizens League is advocating for any decrease in payroll taxes to be taken from the general treasury, not the Social Security Trust Fund.
With 1.2 million supporters, The Senior Citizens League is one of the nation’s largest nonpartisan seniors groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens
League is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.