In the past decades, Social Security Administration has had annual revenue that excesses the amount it pays to beneficiaries. However, U.S. economy situation has created a long-term effect in many of the public organizations and departments. Social Security Administration is one of many departments that will face some economy issues during U.S. economy recovery. Social security will post nearly $600 billion in deficits over the next decade as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, according to new congressional projections, (Ohlemancher, 2011). The funds that Social Security has save to payout their beneficiaries have an expiration date. In the upcoming years more people will be eligible for retirement, however, many of them will only be pay 78 percent of their benefits, (Ohlemancher, 2011).
The government needs to find solutions for the upcoming deficits and be able to help Social Security Administration to no run out of funds. In 2011, Social security administration will collect about 4.6 million retirement, survivor, and Medicare claims. 3.3 million Social Security and SSI claims and 326,000 SSI aged claims, (Social Security, 2011). These claims have to go to procedures that can take months to be approval. During these procedures, many more applicants are eligible to apply for social security and more money is pay to beneficiaries. In 2011, social security will collect $45 million less in payroll that it pays out in retirement, disability and survivor benefits, according to the nonpartisan Congressional Budget Office, (Ohlemacher, 2011). 54 million people receive retirement, disability or survivor benefits with an average payment of $1,076 a month, (Ohlemacher, 2011).
Social Security Administration has being able to save and invest taxpayers money into U.S. Treasury department. The money save into U.S. treasury department accumulates interest for future Social Security beneficiaries. Social Security has built up $2.5 trillion surplus since the retirement program was last overhauled in the 1980s, (Ohlemacher, 2011) The money that Social Security invested in the treasury department is no physically available for social security beneficiaries. The $2.5 trillion has been borrowed over the years by the federal government and spent on other programs. In a promised to pay off the surpluses Treasury department has issued bonds to Social Security, Guaranteeing payments with interest (Ohlemacher, 2011). If the situation gets worst for social security and asks federal government to pay off, there’s no way that social security will obtain the money because there’s no federal funds to pay off the debts to Social Security.
This can cause delay payments to beneficiaries and future applicants. Social Security will face deficit in the following years if congress do not take action to solve the future of the Social Security Administration. If federal government finds a solution to pay off social security, the money can run out by 2037 which is the date that many have projected, (Ohlemacher, 2011). The funds that social security currently has will be able to last for the next four years, after funds run out Social security will enter into deficit and start pushing federal government for the money that has being invested into trust funds. The U.S. economy is not at its best situation to help others. The nation needs to help their states and citizens first before helping others. If U.S. cut foreign aid in the next years, millions of dollars can be save.
The cut in foreign aid can save $17 million by 2015 or reduce the aid in half and save $17 by 2030; (LEONHARDT and MARSH, 2010). This amount does not resolve the future deficit of social security, but helps federal government from continue borrowing more money from social security trust funds. This money can be used to fund other departments and pay off other debts. Thousands of troops need to be withdrawn from the eastern countries. The military need to reduce their noncombat troops and send them back home. The creation of new missiles and new combat research need to be reduce or postpone until the economy gets better.
Speed up withdrawal of Iraq/Afghanistan troops to a total of 60,000 remaining by 2015 and the nation can save up $150 million, moreover, Speed up withdrawal of Iraq/Afghanistan troops to a total of 30,000 remaining and this can save the nation $170 million, (LEONHARDT and MARSH, 2010). The creation of new missiles and new combat research need to be reduce or postpone until the economy gets better. Also, reduce the spending in space-based missile defense. Cutting military troops and programs can help the nation millions that can be use to invest in new jobs and small business opportunities. The creation of new jobs will help increase the funds in social security and reduce the future deficit in social security.
In the incoming years the baby boomers are going to be eligible for retirement and they will be face with a deficit of millions of dollars. The government needs to act immediately to resolve this economy crisis and be able to pay off Social Security funds with their interest that were promise. Federal government needs to cut down programs or future programs in order for social security to continue giving benefits to those 54 million people. These solutions cannot implemented right away because there are many stakeholders that have a major role in the approval of cutting programs. The government needs to take action to resolve Social Security future deficit.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 22 November 2016
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