The Social Security trust fund is broke
A recent letter writer asserted that the Social Security trust fund would grow to five times the estimated annual payout by the year 2015.
His sources are certainly questionable, as the Social Security Trustees report of 2013 indicates that the trust fund is completely broke and relies on income from payees into the system, interest, fund reimbursement from the government general fund and taxes in order to make annual payments.
This past year, during the debate about the budgetary credit limit, both President Obama and Treasury Secretary Geithner stated that if a credit limit deal was not reached, all Social Security payments were in jeopardy of not being met. If Social Security had a trust fund, how could the government credit limit impact annual payments?
If there were real assets in the fund, Social Security could mail the checks regardless of what Congress does about the credit limit. But there is not. In fact, the trust fund is completely empty, the funds borrowed over the years by the government and spent on other things.
The trustee report states that there will be an average negative difference of $75 billion for the years 2013-18 between the amount collected that necessary to pay annual benefits. There are bonds from the general fund with promises to pay back the money borrowed over the years, but the Social Security trust fund itself is bankrupt.