Letter to Sen. Isakson: Social Security Is Not 'Going Broke'
|Written by Dean Baker|
|Thursday, 03 May 2012 11:45|
The Honorable Johnny Isakson
Dear Senator Isakson:
In a recent appearance before the Fayette County, GA Chamber of Commerce, you said “…Social Security and Medicare are contracts with our government. They are contracts, not gifts. They should not be invalidated but they must be reformed. Social Security is going broke in 2034 and we have to fix it.”
While the program does face a shortfall in the 2030s, the reality is that Social Security benefit payments will not ‘go broke’ in 2034. While the Social Security trustees report shows that the program only be able to pay full scheduled benefits through the year 2033, at which point the trust fund would be depleted, there will still be an enormous amount of revenue coming into the system each year. (The projections of the Congressional Budget Office are more optimistic and show that Social Security will pay full benefits through 2038.) After that, even if Congress makes no changes to the program whatsoever, Social Security will still be able to pay over 75 percent of the full benefit. The payable benefit after the projected date of trust fund depletion will still be higher than the benefit received by retirees today, so the system would be far from broke.
As you continue to discuss Social Security, I hope you and your staff will have the opportunity to further review the design and finances of the program. If you would like any additional background on this, I would be happy to assist you.