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CBO Predicts Social Security Deficit in 2010
Data from the U.S. Congressional Budget Office predicts that 2010 will be the first year that the Social Security payouts will begin to exceed revenues, something that was not expected to happen until 2016. However, says the New York Times, this timetable has been accelerated due to the crash in the real estate market and the consequent economic downturn. Rising unemployment is increasing the number of people applying for benefits while, at the same time, decreasing the number of people supporting them through taxes. As a result, the data estimates that Social Security will be $29 billion in the red by the end of September, with three years of deficits to follow.
Still, current beneficiaries need not worry about the fund going completely broke. That’s reserved for 2037, when the treasury bonds that the government started buying the last time the fund was in trouble in the 1980s run out, at which point it is estimated that income would be sufficient to pay about three fourths of scheduled benefits through 2083.
This is not the first time that the economic downturn has thrown a wrench into Social Security calculations in recent memory; in October of last year, it was announced that, due to the fact that the consumer price index actually shrunk during the recession, there would be no cost of living adjustments for beneficiaries this year, a move that rankled seniors who noted that medical costs have usually risen well past the rate of inflation.