WASHINGTON (AP) - 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.
This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.
Last year, Social Security posted its first deficit since the program was last overhauled in the 1980s. The CBO said at the time that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016.
But the new projections show nothing but red ink until the Social Security trust funds are exhausted in 2037.
The outlook has grown bleaker as the nation struggles to recover from its worst economic crisis since Social Security was enacted during the Great Depression. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.
More than 54 million people receive retirement, disability or survivor benefits from Social Security. Monthly payments average $1,076.
Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out.
That is projected to happen in 2037 - unless Congress acts in the meantime.
At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.
Social Security has been supported by a 6.2 percent payroll tax paid by both workers and employers.
