Social Security in the Red

Kathryn Nix / June 14, 2010

In February, we reported that in 2010, Social Security would start running deficits in 2010.  Well, Social Security deficits have officially arrived, as analyst Michael Barone lays out in the Washington Examiner:

Social Security tax receipts for the first half of 2010: $346.9 billion; Social Security benefits payments for the same period: $347.3 billion. Before this year, projections have always been that Social Security wouldn’t cross that line into negative cash flow for five years or so. Now it’s a reality. Congress has been spending Social Security’s positive cash flow for years. Now there’s no positive cash flow to spend.

These deficits are a result of the current economic climate.  Federal revenues have continued to dwindle as job creation stagnates, reducing tax collection along with it.  Unemployment has also forced many Americans into early retirement, adding to the ranks of those dependent on Social Security. (more…)