Social Security's Surplus Disappearing Fast in Downturn

Social Security's Surplus Disappearing Fast in Downturn

Federal budget worrywarts (myself included) have been fretting for years about the arrival of the Dread Fiscal Year 2017, when Social Security was projected to start becoming a drag on federal finances.

Well, no need to worry about 2017 any more. Thanks to the worst economic downturn since the 1930s, the moment of reckoning is already almost here: According to both the budget proposed by the White House in February and projections issued by the Congressional Budget Office (CBO) in March, Social Security benefits ($659 billion, according to the CBO) will exceed payroll taxes ($653 billion) in fiscal 2009 for the first time since 1984.

Payroll tax receipts generally hold up much better in recessions than income taxes, but job losses have been so severe that the CBO expects them to decline slightly from 2008, while benefits rise almost 9% because of cost-of-living adjustments and the beginnings of the baby boomer retirement wave.

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http://news.yahoo.com/s/time/20090410/us_time/08599189054200