Social Security trust fund drained?
Mon, 31 Jan 2011 01:28:03 GMT —
Congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.
According to those projections, this year alone, Social Security will collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits. This has caused panic in some Valley residents, like Charlie Austin, looking towards their future.
"After all that money that you spent and put into the government they give it back to you and they take care of you the way you took care of them and I think it really - it stinks," Austin said.
However, University of Texas Pan American Associate Professor Dr. Samuel Freeman said that although Social Security has long term funding problems, the public has been misguided by an excess of inaccurate information.
"The statement was that by 2037 Social Security would be sucked dry, that there would be no money to pay the scheduled benefits, and that's absolutely false," Freeman said.
Freeman said that when the Social Security trust fund runs out, at least 78 percent of scheduled benefits will be paid, helping many Americans stay out of poverty.
"The poverty rate for one person is $10,956, Freeman said. So Social Security benefits pay a little above the poverty rate."
Freeman agrees that Social Security faces long term financial problems but said the media has created hysteria and fear amongst Americans - something that hurts the Social Security program which is crucial for people in the Valley.
Then people in the Valley retire, the vast majority are extremely dependant on Social Security, Freeman said. So if we go around spreading misinformation and telling lies about Social Security among people that it is going to be most beneficial for, what that does is it weakens their support for Social Security."
Freeman said the solution is simple.
"The idea is not to impose more taxes on the middle class but to go to those true high income earners, Freeman said. It's very easy all we need to do is to impose the Social Security tax on incomes above $500,000 year."
Freeman said doing so can cut the Social Security deficit in 50 years.