The number of Social Security beneficiaries hit a record 61,859,250 in November, according to data released by the Social Security Administration.
At the same time, according to the Bureau of Labor Statistics, with unemployment at the lowest rate since 2000 (4.1 percent), there were 126,827,000 full-time workers in the United States (including government workers). Yet that equaled only 2.05 full-time workers for each person receiving Social Security benefits.
Even when all 153,918,000 people who had jobs in November are considered (counting both full- and part-time workers), the ratio of workers to Social Security beneficiaries was about 2.49 to 1.
The record 61,859,250 Social Security beneficiaries in November, included 45,439,781 retired workers and their dependents; 5,992,862 survivors of deceased workers; and 10,426,607 disabled workers and their dependents.
The Social Security program has two primary elements: Old Age and Survivors Insurance and Disability Insurance. Each of these are supposed to be supported by a “payroll tax” imposed on a worker’s earnings.
The payroll tax for the OASI is 10.03 percent and is split so that one half is deducted from a worker’s paycheck and the other half is paid to the government by the employer. The payroll tax for DI is 2.37 percent and, like the OASI tax, is split between a deduction from a worker’s paycheck and a payment made directly by the employer.
In total, the worker and employer must pay the government 12.4 percent in taxes (on the first $127,200 a worker makes) for the combined OASDI tax. Self-employed Americans pay the entire 12.4 percent directly.
But this is no longer enough, says the Social Security board of trustees, which includes the commissioner of Social Security and the secretaries of the Treasury, Labor and Health and Human Services.
In the past, when Social Security ran surpluses, the federal government loaned the surplus to itself so it could spend it immediately on other government programs.
In their 2017 report, the Social Security board of trustees puts it this way: “The Department of the Treasury invests trust fund reserves in interest-bearing securities issued by the U.S. Government.”
Without the “interest” the government pays itself back on the money it has already spent from previous Social Security surpluses, the Social Security program would not have enough money now to pay all the current benefits it owes.
“The 2016 excess of total income over cost for the year was $35 billion,” said the trustees’ report. But “total income” — as the report calls it — includes the interest the government pays itself.
“However, when interest income is excluded,” the report admitted, “Social Security’s cost is projected to exceed its non-interest income throughout the projection period, as it has since 2010. For 2016, cost for the year exceeded non-interest income by $53 billion. For 2017, total income for the program is projected to exceed cost for the year by $59 billion, and non-interest income is projected to be $27 billion less than program cost for the year.”
The trustees’ report estimated that the Social Security program faces a $12.5 trillion shortfall over 75 years.
“Through the end of 2091, the combined funds have a present-value unfunded obligation of $12.5 trillion,” said the report.
“If actions are deferred for several years, the changes necessary to maintain Social Security solvency become concentrated on fewer years and fewer generations,” it said.
The report politely recommended that Congress raise taxes, cut benefits, take money from elsewhere, or use a combination of these means, to pay for Social Security.
Going into the Christmas weekend, the federal debt was $20,492,874,492,282.58.
That equaled approximately $133,142 in debt for each of 153,918,000 people who had a full- or part-time job in the United States in November.