Congratulations, Social Security: Like so many in America, you’re now spending more than you make.
In March, the Congressional Budget Office projected that Social Security would go into a deficit this year. Previous estimates had estimated that the program wouldn’t run a deficit until at least 2016; during the Bush years, the program was expected to run deficit-free until 2018.
In a report released this morning, the Social Security’s Trustees confirmed that the program will run a deficit both this year and next. This year, outlays will exceed revenue by $41 billion, marking the first time that the program will run a deficit since 1983. Over the next few decades, the report says, the program’s trust fund will be drawn down. In 2037, the fund will run dry completely, leaving the program to operate exclusively on tax revenues that are only expected to pay for about three quarters of promised benefits.
Of course, that’s assuming you buy the gimmicks that allow the Trustees to claim there’s a trust fund at all. As Jacob Sullum argued earlier this year:
The government already has spent all of this money (and then some). All that is left in the "trust fund" is IOUs from one part of the government to another. And guess who has to make good on those IOUs? While there is budgetary significance to this accounting fiction (since Social Security cannot legally continue paying benefits after its notional reserve is officially exhausted), all this talk of a trust fund tends to obscure reality.