Rep. John Lewis: Trustees Report Social Security is Solvent
WASHINGTON--Today, the Social Security Trustees released their annual report on the financial solvency of the program. Much political debate in the past decade has surrounded the potential bankruptcy of this foundational element of the social safety net programs offered by the federal government. Figures have been bandied about, but the trustees’ report reveals talk about the imminent demise of Social Security is unfounded. An overview follows:
- It should be noted that the Social Security system has borne the significant pressure of a crashing economy remarkably well and that, unlike the banks, it did not require a bailout.
- Apparently, Social Security has a “large and growing surplus” equalling $2.7 trillion at the end of 2011, and the trustees project it will retain that surplus at the end of 2012.
- The trustees suggest that continuing maintenance, as is required of any system, is needed to build upon this growth, but without any Congressional action, Social Security benefits can be “paid in full and on time” until 2033.
- Some organizations suggest equalizing the percentage of contribution to strengthen the future of the program even further. Currently people making $50,000 contribute 6 percent to Social Security, while those making above $500,000 contribute 1 percent. Finding a way to balance this rate of contribution, especially when the highest wage earners are also receiving the biggest tax breaks and thus have more expendable income, will help strengthen the system.
“This report,” says Rep. John Lewis, “should lay the fears of many people to rest. Many of the Democrats on the Ways and Means Committee have been trying to shout above a flood of misinformation that one of the best run and most effective government programs ever devised is still inherently sound and should remain an important federal investment. The people need to ask why some of their representatives were arguing in favor of privatization when the program still demonstrates a great deal of vitality. And with modest adjustments Social Security could continue to provide security and stability for seniors many decades into the future.”
CHANGES TO SOCIAL SECURITY PAYMENT SYSTEM
Recently, the Treasury Department underscored an important change to its system of payments. Beginning in 2013, people will no longer receive their federal checks in the mail. The federal government is phasing out all paper check benefits and will require people to receive payments electronically, either through direct deposit or a debit card, if they have no bank account.
This will affect Social Security, veterans’ benefits, railroad pensions and federal disability payments. Tax refunds are exempt though many people already file electronically. The changes will save the federal government $120 million a year, and Social Security will save $1 billion over the next decade.