Social Security Stunner; Bankruptcy of Nation Moved Up Several Years

When conducting my own retirement planning, I do not even count on Social Security being part of my income. Benefit ages are sure to rise and the amount recieved relative to the real cost of living will fall.-Lou

Social Security Stunner; Bankruptcy of Nation Moved Up Several Years

With unemployment rising, the payroll tax revenue that finances Social Security benefits for nearly 51 million retirees and other recipients is falling, according to a report from the Congressional Budget Office. As a result, the trust fund's annual surplus is forecast to all but vanish next year -- nearly a decade ahead of schedule -- and deprive the government of billions of dollars it had been counting on to help balance the nation's books.

The Treasury Department has for decades borrowed money from the Social Security trust fund to finance government operations. If it is no longer able to do so, it could be forced to borrow an additional $700 billion over the next decade from China, Japan and other investors. And at some point, perhaps as early as 2017, according to the CBO, the Treasury would have to start repaying the billions it has borrowed from the trust fund over the past 25 years, driving the nation further into debt or forcing Congress to raise taxes.

The new forecast is fueling calls for reform of the Social Security system from conservative analysts, who say it underscores the financial fragility of a system that provides a primary source of income for millions of Americans.

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http://www.washingtonpost.com/wp-dyn/content/article/2009/03/30/AR2009033003291.html