Social Security deficit slides to worst showing in a generation

posted at 3:35 pm on January 7, 2010 by Ed Morrissey

Steve at No Runny Eggs has kept a close eye on the financial statements from the Social Security administration, and he has good reason to do so.  Earlier this year, we began to see monthly deficits from SSA, a result of income drops as the recession and unemployment deepened.  However, with the Obama administration arguing that the economy has already begun its recovery, the deficits at SSA have hit their deepest ever:

The Social Security Administration’s Office of the Chief Actuary finally got around to posting the detailed November numbers for Social Security, and things have only gotten worse:

  • The combined OASDI (Old-Age Survivors and Disability Insurance) “Trust” Funds posted a $5.858 billion primary (cash, non-“interest”) deficit for November, the worst monthly performance since monthly records began in 1987.
  • The 12-month OASDI primary surplus was only $9.598 billion, also the worst 12-month performance since monthly records began.

Since there won’t be an cost-of-living increase in Social Security benefits, the combined funds may yet avoid a 12-month primary deficit in 2010 by the skin of its teeth. However, that is dependent on an improvement in the wage situation, and specifically an improvement in the job prospects of those between 62 and 67 years old. Somehow I don’t see the trend of older and higher-earning workers losing their jobs disproportionately reversing.

And the DI has begun to cannibalize its capital in order to pay off benefits:

  • For the 50th straight month, going back to October 2005, the DI Fund ran a 12-month primary deficit, this time hitting a new high of $21.399 billion.
  • Outside of the “double tax-collection” months of January and April (when it recieves both the quarterly estimated income tax payments, also received in June and September and the quarterly tax on benefits, also received in July and October), the last time the DI Fund posted a monthly primary surplus was September 2007 (which itself is a “tax-collection” month, specifically of the quarterly estimated income tax payments). One would have to go back to March 2007 to find a month outside of a “tax-collection” month with a monthly primary surplus, and all the way back to May 2003 to find a month outside both the “tax-collection” and “tax-season” months (January through April) with a monthly primary surplus.
  • A similar monthly situation with the overall DI Fund exists – outside of the “double tax-collection” months and the semi-annual interest-crediting months (June and December), the last time it posted an overall monthly surplus was September 2007; and outside of tax or interest “enhancements”, the last overall monthly surplus was posted in July 2003.
  • All that has led to the DI Fund entering a 12-month overall (which includes the effects of “interest”) deficit beginning in February 2009, which means it is redeeming more US Treasuries than it is buying. That 12-month overall deficit, which has existed since then, has now hit $10.525 billion, the first time it topped the $10 billion mark.

Recall that Peter Orszag, now Director of OMB, predicted as CBO Director in August 2008 that no one needed to worry about SSA until 2019:

Today, Social Security’s revenues each year are greater than its outlays, but as the baby-boom generation (people born between 1946 and 1964) continues to age, growth in the number of Social Security beneficiaries will accelerate, and outlays will grow substantially faster than revenues. CBO projects that outlays will first exceed revenues in 2019 and that the Social Security trust funds will be exhausted in 2049.2 If the law remains unchanged, the Social Security Administration (SSA) will then no longer have the legal authority to pay full benefits.

Orszag wasn’t even right in the month he made the prediction.  Democrats used this analysis to paint Republicans demanding Social Security reform as hysterics who wanted to attack retiree benefits and suck up to Wall Street.  Here’s the cash flow for the past two years as reported by SSA.  See for yourself who had this right (amounts in millions):

Month Total income Total outgo Net increase in assets Assets at end of month
Jan-08 $70,231.00 $50,709.00 $19,521.00 $2,258,021.00
Feb-08 $53,467.00 $50,828.00 $2,639.00 $2,260,660.00
Mar-08 $59,152.00 $51,622.00 $7,530.00 $2,268,190.00
Apr-08 $75,719.00 $51,327.00 $24,392.00 $2,292,582.00
May-08 $55,153.00 $51,893.00 $3,259.00 $2,295,842.00
Jun-08 $119,434.00 $55,735.00 $63,700.00 $2,359,541.00
Jul-08 $55,719.00 $52,033.00 $3,686.00 $2,363,227.00
Aug-08 $51,816.00 $51,934.00 ($118.00) $2,363,109.00
Sep-08 $55,316.00 $52,134.00 $3,182.00 $2,366,291.00
Oct-08 $51,767.00 $52,086.00 ($320.00) $2,365,971.00
Nov-08 $51,569.00 $51,992.00 ($423.00) $2,365,548.00
Dec-08 $105,961.00 $52,851.00 $53,110.00 $2,418,658.00
Jan-09 $71,879.00 $55,290.00 $16,589.00 $2,435,248.00
Feb-09 $54,505.00 $55,760.00 ($1,255.00) $2,433,993.00
Mar-09 $58,907.00 $56,135.00 $2,772.00 $2,436,765.00
Apr-09 $77,144.00 $56,596.00 $20,548.00 $2,457,313.00
May-09 $54,574.00 $56,330.00 ($1,755.00) $2,455,558.00
Jun-09 $120,040.00 $61,383.00 $58,657.00 $2,514,215.00
Jul-09 $56,367.00 $56,890.00 ($523.00) $2,513,692.00
Aug-09 $50,729.00 $56,490.00 ($5,761.00) $2,507,931.00
Sep-09 $53,565.00 $57,884.00 ($4,319.00) $2,503,612.00
Oct-09 $52,743.00 $57,506.00 ($4,763.00) $2,498,849.00
Nov-09 $51,562.00 $57,270.00 ($5,707.00) $2,493,141.00

And this is for DI only:

Month Total income Total outgo Net increase in assets Assets at end of month
Jan-08 $9,857.00 $8,823.00 $1,034.00 $215,918.00
Feb-08 $7,760.00 $8,830.00 ($1,070.00) $214,848.00
Mar-08 $8,589.00 $9,013.00 ($424.00) $214,424.00
Apr-08 $10,753.00 $9,095.00 $1,659.00 $216,082.00
May-08 $8,003.00 $9,011.00 ($1,007.00) $215,075.00
Jun-08 $14,475.00 $9,730.00 $4,745.00 $219,820.00
Jul-08 $7,809.00 $8,965.00 ($1,157.00) $218,663.00
Aug-08 $7,526.00 $8,814.00 ($1,288.00) $217,375.00
Sep-08 $8,036.00 $9,172.00 ($1,136.00) $216,239.00
Oct-08 $7,273.00 $9,146.00 ($1,873.00) $214,366.00
Nov-08 $7,518.00 $9,097.00 ($1,578.00) $212,788.00
Dec-08 $12,240.00 $9,256.00 $2,985.00 $215,773.00
Jan-09 $10,117.00 $9,702.00 $416.00 $216,189.00
Feb-09 $7,914.00 $9,693.00 ($1,779.00) $214,409.00
Mar-09 $8,529.00 $9,987.00 ($1,458.00) $212,951.00
Apr-09 $10,918.00 $10,202.00 $716.00 $213,667.00
May-09 $7,928.00 $10,072.00 ($2,145.00) $211,522.00
Jun-09 $14,093.00 $10,598.00 $3,495.00 $215,017.00
Jul-09 $7,876.00 $10,120.00 ($2,244.00) $212,773.00
Aug-09 $7,371.00 $9,944.00 ($2,572.00) $210,201.00
Sep-09 $7,903.00 $10,327.00 ($2,424.00) $207,777.00
Oct-09 $7,382.00 $10,341.00 ($2,958.00) $204,819.00
Nov-09 $7,546.00 $10,100.00 ($2,554.00) $202,265.00

June is also a tax collection month, which is why that number came up in the black.  Note that the September collection didn’t even create a positive blip here.

Get the picture?  Collapse is coming a lot sooner than 2049.  Maybe Barack Obama should find someone whose predictions don’t come up as consistently bad as Orszag’s to help run the budget.

Month Total income Total outgo Net increase in assets Assets at end of month
Jan-08 $70,231.00 $50,709.00 $19,521.00 $2,258,021.00
Feb-08 $53,467.00 $50,828.00 $2,639.00 $2,260,660.00
Mar-08 $59,152.00 $51,622.00 $7,530.00 $2,268,190.00
Apr-08 $75,719.00 $51,327.00 $24,392.00 $2,292,582.00
May-08 $55,153.00 $51,893.00 $3,259.00 $2,295,842.00
Jun-08 $119,434.00 $55,735.00 $63,700.00 $2,359,541.00
Jul-08 $55,719.00 $52,033.00 $3,686.00 $2,363,227.00
Aug-08 $51,816.00 $51,934.00 ($118.00) $2,363,109.00
Sep-08 $55,316.00 $52,134.00 $3,182.00 $2,366,291.00
Oct-08 $51,767.00 $52,086.00 ($320.00) $2,365,971.00
Nov-08 $51,569.00 $51,992.00 ($423.00) $2,365,548.00
Dec-08 $105,961.00 $52,851.00 $53,110.00 $2,418,658.00
Jan-09 $71,879.00 $55,290.00 $16,589.00 $2,435,248.00
Feb-09 $54,505.00 $55,760.00 ($1,255.00) $2,433,993.00
Mar-09 $58,907.00 $56,135.00 $2,772.00 $2,436,765.00
Apr-09 $77,144.00 $56,596.00 $20,548.00 $2,457,313.00
May-09 $54,574.00 $56,330.00 ($1,755.00) $2,455,558.00
Jun-09 $120,040.00 $61,383.00 $58,657.00 $2,514,215.00
Jul-09 $56,367.00 $56,890.00 ($523.00) $2,513,692.00
Aug-09 $50,729.00 $56,490.00 ($5,761.00) $2,507,931.00
Sep-09 $53,565.00 $57,884.00 ($4,319.00) $2,503,612.00
Oct-09 $52,743.00 $57,506.00 ($4,763.00) $2,498,849.00
Nov-09 $51,562.00 $57,270.00 ($5,707.00) $2,493,141.00

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Well, Orszag has been busy with other things…

d1carter on January 7, 2010 at 4:34 PM

WashJeff on January 7, 2010 at 4:13 PM

You are right. I have 2 boys 17 and 13. Trust me when I say they know more about what is going on in this country than most college students do. I love it when I tell them something that I think is important for them to know and they ask really good questions to get a better knowledge of it. Makes me proud.

milwife88 on January 7, 2010 at 4:35 PM

Recall that Peter Orszag, now Director of OMB, predicted as CBO Director in August 2008 that no one needed to worry about SSA until 2019:

Collapse is coming a lot sooner than 2049.

Was the prediction 2019 or 2049? I’m a guy who likes to plan. ;-)

rhombus on January 7, 2010 at 4:35 PM

Get the picture? Collapse is coming a lot sooner than 2049. Maybe Barack Obama should find someone whose predictions don’t come up as consistently bad as Orszag’s to help run the budget.

I only wish folks like you and Allahpundit “got the picture”, Ed. Beck has been talking about this for months. This collapse is by design.

As always, those of you who continue to simply view Obama and his evil associates as stupid or wrong, do so at your own peril.

RightWinged on January 7, 2010 at 4:35 PM

You can’t stop spending when you have voters to buy.

thomasaur on January 7, 2010 at 4:33 PM

Yep, you’re absolutely correct. Politicians are like little children. When they do something bad they should be spanked and sent to bed without supper. You up for spanking some spoiled brats?

Oldnuke on January 7, 2010 at 4:36 PM

Was the prediction 2019 or 2049? I’m a guy who likes to plan. ;-)

rhombus on January 7, 2010 at 4:35 PM

It depends on your defintion of “collapse”. Orszag thought that Social Security would go into a cash deficit in 2019, with fund exhaustion in 2049.

steveegg on January 7, 2010 at 4:38 PM

. You up for spanking some spoiled brats?

Oldnuke on January 7, 2010 at 4:36 PM

I’m game, it’s just that they’ve rigged the system so that not enough of their hides are in jeopardy at the same time to give the Senate the enema that it so badly needs.

thomasaur on January 7, 2010 at 4:40 PM

No problem. Let’s just increase minimum wage to $30/hr. Think of all the extra payroll taxes. We thought the bump up to $7/hr would help but apparently not.

/s

mrsmwp on January 7, 2010 at 4:40 PM

Public sector employees don’t pay into Social Security. Government is the only sector of the economy that is hiring. The math is simple.

Sheerq on January 7, 2010 at 4:48 PM

I’m game, it’s just that they’ve rigged the system so that not enough of their hides are in jeopardy at the same time to give the Senate the enema that it so badly needs.

thomasaur on January 7, 2010 at 4:40 PM

I think that enema is getting closer every day. In all the years I’ve been around I’ve never seen so many people pissed off at the government. The 60s were nothing compared to what I’m seeing today.

Oldnuke on January 7, 2010 at 4:52 PM

When Social Security was put into law, there were several items that were deemed unconstitutional. These items were addressed one at a time until the language met Constitutional requirements.
This is how the healthcare bill will be handled; Even though it is known to be unconstitutional, they will revise the language until it complies, not changing the basic bill at all.
When this Congress wants to bankrupt this country, absolutely nothing nor anyone will stop them.

Cybergeezer on January 7, 2010 at 4:53 PM

Public sector employees don’t pay into Social Security. Government is the only sector of the economy that is hiring. The math is simple.

Sheerq on January 7, 2010 at 4:48 PM

Define Public Sector Employees. That’s a very general term. Which government employees don’t pay into social security?

Oldnuke on January 7, 2010 at 4:54 PM

The 60s were nothing compared to what I’m seeing today.

Oldnuke on January 7, 2010 at 4:52 PM

In the 60′s we weren’t sure how to be pi$$ed off effectively, wisdom and cunning over youthful exuberence.

thomasaur on January 7, 2010 at 4:54 PM

thomasaur on January 7, 2010 at 4:54 PM

Exactly.

Oldnuke on January 7, 2010 at 4:56 PM

Public sector employees don’t pay into Social Security. Government is the only sector of the economy that is hiring. The math is simple.

Sheerq on January 7, 2010 at 4:48 PM

Yeah, funny how that works. They don’t have to pay into the crappy SS system, they get a defined benefits lifetime pension. They won’t have to be on the crappy public option for healthcare, they get cadillac-plan health insurance. All on our dime. How about we furlough all “non essential” government workers. Oh, it would cause us massive inconvenience at first, but in the end it would be worth it.

mrsmwp on January 7, 2010 at 4:56 PM

The Democrats just view this as a way to ‘cull the litter’, so to speak.

Those of us who had to pay into SS all these years knew it was a sham and that it was going BK. We had no choice. Now we are facing the rationing commission, aka “death panels.”

Whatever is saved by killing us will be given to illegals and welfare recipients.

Where are the trolls? They’re in line for this treatment as well. Suckers.

Cody1991 on January 7, 2010 at 4:58 PM

Define Public Sector Employees. That’s a very general term. Which government employees don’t pay into social security?

Oldnuke on January 7, 2010 at 4:54 PM

In Maine, ALL state employees, as well as ALL teachers in public schools are exempt from Social Security. Instead, they pay into the Maine State Retirement System.

It is suffering the same problems with mismanagement that Social Security is, because years of Democrat controlled legislatures and the governorship have seen them raid the Maine State Retirement System for “loans” to run other social engineering programs.

AW1 Tim on January 7, 2010 at 4:59 PM

Same holds true in Illinois, state, municipal, teachers…

Sheerq on January 7, 2010 at 5:02 PM

General Rule for Civil Service Employees of Federal Government – before 1986(?) they didn’t pay into SS. After, “new” hires do pay.

msflea on January 7, 2010 at 5:04 PM

Sheerq on January 7, 2010 at 5:02 PM
AW1 Tim on January 7, 2010 at 4:59 PM

Ok, some groups in some states. I think there are some railroad workers that don’t pay into it either. I honestly don’t know if any groups in Virginia don’t pay into SS or not. I do know that federal employees pay SS, at least the ones I know do.

Oldnuke on January 7, 2010 at 5:09 PM

the educated class members at the Urban League/Brookings are wondering how to subsidize the permanent 8% unemployment we’re going to have under Obama

last i checked unemployed people don’t pay SS taxes.

rosy senarios are getting ugly pretty fast…too bad the smiley faced educated classes don’t have clue 1 on what to do.

but, hey, they can fake climate data

r keller on January 7, 2010 at 5:09 PM

Get the picture? Collapse is coming a lot sooner than 2049. Maybe Barack Obama should find someone whose predictions don’t come up as consistently bad as Orszag’s to help run the budget.

Orzag’s too busy chasing tail. Will his illegitimate daughter be able to collect Social Security? Will he bother to support her?

BuckeyeSam on January 7, 2010 at 5:10 PM

I think we’ve also passed the tipping point on taxpayer population percentage too. We now have more non-taxpayers than taxpayers. That is also a factor in this.

Oldnuke on January 7, 2010 at 5:14 PM

That geeky Orszag can barely keep up with all his children from a former marriage and his out-of-wedlock children, how can anyone expect him to keep accurate numbers and stuff? It’s HARD, man, and, like, WORK. Hmmm. “Hey, honey, cmere…you sure do look good…hmm…you say you like geeky guys in Roy Orbison glasses?”

bradley11 on January 7, 2010 at 5:17 PM

Next up – government confiscates all private retirement plans (for our own safety) and rolls them into Social Security. And just like that, boom, a new multi-trillion dollar slush fund, backed up by the usual pile of worthless IOUs.

Mr. Pickles on January 7, 2010 at 5:37 PM

but didn’t Orzag go to princeton?

is he not one of the educated class?

should we even be questioning the inhabitant of Mount Olympus?

jcrue on January 7, 2010 at 5:46 PM

should we even be questioning the inhabitant of Mount Olympus?

jcrue on January 7, 2010 at 5:46 PM

to even THINK about questioning Teh One is RACIST!!!

don’t worry, the ADULTS are in charge now…they’ll uh take care of us…soon we’ll be thankful for our one bowl of gruel a day they allot us..

look at detroit for our future…

SS is a ponzi scheme…it should collapse.

right4life on January 7, 2010 at 5:57 PM

the educated class members at the Urban League/Brookings are wondering how to subsidize the permanent 8% unemployment we’re going to have under Obama

WAY too optimistic…think 15-20%…..

right4life on January 7, 2010 at 5:59 PM

Mr. Pickles on January 7, 2010 at 5:37 PM

Sadly, that has already been discussed.

The EEOC’s enforcement of age discrimination laws is spotty and ineffective. I know many older workers who got the shaft because of higher salary and what the employer perceived as a “good business decision” since the employees were close to retirement age. The EEOC is inept and absent on these cases.

eaglesdontflock on January 7, 2010 at 6:04 PM

Orszag better get ready to get thrown under that bus. If Barry is sure of one thing, it’s OLD PEOPLE ALWAYS VOTE. Oddly enough, OLD PEOPLE are on SOCIAL SECURITY.

GarandFan on January 7, 2010 at 6:50 PM

Life expectancy for both sexes in this nation is going to be 60 (think, Soilant Green or, more accurately, Logan’s Run).

That, or the age of benefits will increase to 85 and above.

Good luck to the baby boomers who were expecting to retire on SS benefits rather than save for themselves. Want to raise my taxes to pay for your retirement? See Logan’s Run above.

BowHuntingTexas on January 7, 2010 at 7:08 PM

As with all ponzi schemes, the end will come with terrible repercussions.

The pyramid’s base is made from clay.

larvcom on January 7, 2010 at 7:09 PM

Madoff went to jail. These ass hats are going to get reelected.

Mojave Mark on January 7, 2010 at 7:22 PM

I only wish folks like you and Allahpundit “got the picture”, Ed. Beck has been talking about this for months. This collapse is by design.

As always, those of you who continue to simply view Obama and his evil associates as stupid or wrong, do so at your own peril.

RightWinged on January 7, 2010 at 4:35 PM

YES YES YES and YES SIR. Allah is a godless skeptic who can’t see the forest thru the trees. He may make great “conservative” points, but he is lost without a paddle in the big picture/scheme of things. I’m not sure where Ed stands on this, but he at least has some recognition of evil.

leftnomore on January 7, 2010 at 7:25 PM

Single payer health care will fix this: by denying care, those oldsters will croak, with them dead, poof! No more worry about Sociable Security. Ingenious.

TinMan13 on January 7, 2010 at 7:39 PM

CBO projects that outlays will first exceed revenues in 2019 and that the Social Security trust funds will be exhausted in 2049.

The “trust fund” is exhausted each year, every year, by appropriations for the general budget. This sort of nonsense is on much the same level as saying, “I’m fiscally sound, because for years, I’ve been transferring my savings from my left pocket to my right pocket before spending it. I can live for years on what my right pocket owes my left pocket.” I am so looking forward to this bonfire of vanities.

Kralizec on January 7, 2010 at 8:16 PM

The “trust fund” is exhausted each year, every year, by appropriations for the general budget. This sort of nonsense is on much the same level as saying, “I’m fiscally sound, because for years, I’ve been transferring my savings from my left pocket to my right pocket before spending it. I can live for years on what my right pocket owes my left pocket.” I am so looking forward to this bonfire of vanities.

Kralizec on January 7, 2010 at 8:16 PM

Acutally, it’s exhausted each government business day, but the point still holds. The cash deficits are the key tipping port in this Ponzi scheme.

steveegg on January 7, 2010 at 8:57 PM

I hope my rifle arrives soon at the gunshop for me to pick up.

It would be a bummer without it if the world collapses next week.

:)

Sapwolf on January 7, 2010 at 11:34 PM

Enjoy it while you can. Peter Schiff was basically correct in that all this will lead to further eroding of our living standards as we continue to spend what we don’t have and NOT produce more.

Sapwolf on January 7, 2010 at 11:35 PM

Can we go Galt and Genghis Khan at the same time?

Sapwolf on January 7, 2010 at 11:37 PM

On the bright side, just think how much cheaper houses will be when boomer retirees have to sell theirs and move in with the kids!

Recovery, we hardly knew ye.

shuzilla on January 8, 2010 at 9:39 AM

Well the Dems couldn’t very well interrupt their scorched earth campaign against Bush in 2005 long enough to address fixing Social Security.

Priorities.

There Goes The Neighborhood on January 8, 2010 at 11:29 AM

Can we go Galt and Genghis Khan at the same time?

Sapwolf on January 7, 2010 at 11:37 PM

|

+1000

Metanis on January 8, 2010 at 1:25 PM

Comment pages: 1 2