Social Security and payroll tax
According to a recently released report by the nonpartisan Congressional Budget Office, a permanent payroll tax increase of 1.6 percent would need to go into effect immediately in order to maintain the solvency of the Social Security system for the next 75 years.
If this does not occur, the CBO projects that the Social Security trust fund is likely to hit $0 around 2038. It also estimates that the disability insurance coffers will be tapped by 2017 and the old-age and survivors' trust will be fully depleted in 2040.
The government has borrowed surpluses run by the Social Security program to spend on other programs for much of the past 30 years. However, it can no longer count on that.
Currently, approximately 56 million Americans receive Social Security benefits - about a sixth of the country's population. Payouts to those beneficiaries throughout this year are expected to amount to $733 billion, which represents one-fifth of the federal budget. However, payroll taxes and income taxes that are used to pay for the system are projected to only reach $687 billion within the same time period.
If this does not occur, the CBO projects that the Social Security trust fund is likely to hit $0 around 2038. It also estimates that the disability insurance coffers will be tapped by 2017 and the old-age and survivors' trust will be fully depleted in 2040.
The government has borrowed surpluses run by the Social Security program to spend on other programs for much of the past 30 years. However, it can no longer count on that.
Currently, approximately 56 million Americans receive Social Security benefits - about a sixth of the country's population. Payouts to those beneficiaries throughout this year are expected to amount to $733 billion, which represents one-fifth of the federal budget. However, payroll taxes and income taxes that are used to pay for the system are projected to only reach $687 billion within the same time period.
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