Let's start off by stating the obvious...unless you're an economist or policy analyst, the details of Social Security's funding mechanisms, trust fund operations (OASI & DI) and projection methodology for both, are far beyond what the average American knows (or even cares to know) about the program. Unfortunately, this is exactly why it's so easy for those who want to see the program dismantled to continue their "Social Security is bankrupt" meme, regardless of the facts. The latest headlines claim Social Security is running out of money to pay benefits because of the recession.  This is based on CBO's forecast included as part of its final budget projections and economic outlook.   The headlines screamed: "Slowdown Slashes Social Security Surplus" and "Recession Puts a Major Strain on Social Security Trust Fund".  Thankfully, the Associated Press provided a more thorough description of what's actually happening.  Here's a brief summary of our full analysis now available on the National Committee website: Social Security's trust fund surplus is NOT disappearing. What is happening is that the annual surpluses collected each year, which have been building up our current $2.5 trillion trust fund for decades, are below what was projected prior to the downturn in the economy.  Less employed=fewer payroll taxes=lower annual surplus of contributions over expenditures.  As our President Barbara Kennelly told Nightly Business Report this has nothing to do with the total assets/surplus still held in the Social Security Trust Fund:


Social Security is not running out of money to pay benefits

As Barbara mentioned, even with the recession, the assets held by the Trust Fund will continue to permit payment of full benefits until about 2041. The projected reductions in the "annual surpluses" are not a problem for Social Security.     What this really means is the federal government will have slightly less money to borrow from Social Security  CBO says the federal government will be able to borrow $51 billion less for FY 2010 than projected before the recession.  This is just a tiny fraction of the money the federal government is projected to borrow in FY 2010.  Simply put, there is no Social Security crisis, either before or because of the current recession, no matter how much the media loves these headlines and opponents of Social Security love pitching them.  The irony is that Social Security happens to be one of the few American institutions which has performed well and consistently during this current economic storm.  Social Security's 75 year projection already takes into account cyclical ups and downs in our economy.  When the 2009 Trustees report is issued this spring, the 2041 date is likely to change by only about a year.  Compare that to the 12 years added to the program's long-term solvency since 1996.  Those raising this latest Social Security crisis call were notably silent during this time period. Coincidence?  We think not. Here's more good reading on this issue at Angry Bear and Firedog Lake.