US - The recession and an ageing population will force US social security to pay out more than it takes in for the first time ever this year.
The shortfall had come six years sooner than was projected in last year's report, Treasury Secretary Tim Geithner (pictured) said as he announced the publication of the Social Security Board of Trustees' annual research.
Despite the short term concern, the report added the long term shortfall was 4% lower than estimated last year.
Some 53 million Americans collect social security, which is projected to run out of money by 2037 unless Congress makes benefit cuts or raises revenue sources to put it back in fiscal balance.
"The recession has...somewhat worsened social security's very near term outlook," Geithner said.
"Benefit payments are expected to exceed tax revenue for the first time this year, six years earlier than was projected last year, but the improving economy is expected to result in rough balance between social security taxes and expenditures for several years before the retirement of the baby boom generation swells the beneficiary population and causes deficits to grow rapidly."
"It is projected that tax and interest income will be sufficient to pay benefits through 2024, after which the trust fund will be drawn down until depleted in 2037, the same date of trust fund exhaustion projected last year.
"After 2037, it is expected that tax income will be sufficient to finance more than three quarters of scheduled benefits."
Senator Herb Kohl, chairman of the Senate Special Committee on Aging, which conducted its own official report on social security in May, said far from being in crisis, social security could thrive with some minor changes. These included increasing worker and employer questions and eliminating the tax cap.
"Although it is clear that the economic downturn is impacting the programme, the Social Security Board of Trustees state that the long term social security shortfall is 4% less than it was last year," said Kohl.
"Their conclusions echo the message of our recent report: that far from being in crisis, Social Security can remain secure for future generations with just a few modest tweaks.
"We should tackle this sooner rather than later in a thoughtful, responsible and bipartisan manner in order to keep the programme solvent and strengthen benefits for those who rely on them most."
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