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Social Security
Problem:  Soon there will be more money being paid out than being paid in.
Solution:  Stop spending the Social Security surplus and reduce government spending.
The official name for Social Security is OASDI  (Old Age, Survivors, and Disability Insurance).  Today, Social Security is in dire straights and needs to be restored and protected.  Here's why.
Social Security was established to provide a "safety net" to the retired and disabled.  This Act was originally signed by President Roosevelt in 1935. The system started with no money and needed a funding source.

 

 

Starting in 1937 the Federal Insurance Contributions Act (FICA) was created as a tax collecting mechanism that would require employers to deduct 1% of the workers wages.   The tax deduction on wages would gradually increase over the years to 3% in 1948.
Additionally,  the employers were to pay a percentage of the wages paid.  This employer contribution started at 1% in 1936 and graduated to 3% in 1938.
Today,  the total contribution paid by workers and employers is identical, which totals 15.3 %, to be paid  on the first $90.000.00 of an employee's salary.  This figure is referred to as the Social Security Tax Cap.

Workers      =     pay 6.2% in Social Security and 1.45% for Medicare = 7.65

Employers   =    pay 6.2% in Social Security and 1.45% for Medicare = 7.65

The grand idea was to have the younger aged workers support those citizens that were retired or disabled.   In 1950, 16 workers supported each recipient of Social Security.  Today, 3.3 workers support each recipient of Social Security.  As more and more "baby boomers" start receiving benefits there will be more Social Security recipients than workers contributing to Social Security. 

Another problem with Social Security is how the surplus is managed.  Congress  uses the surplus to support the national annual budget and borrows against the Social Security Trust. In return, Congress  offers Treasury bills (special bonds) to the Social Security Trust  as a form of collateral and pays interest on the borrowed money.  The interest is paid with US tax dollars. 
 

Below is a visual of how Social Security works. 

Here are some key dates:

In 2009 the annual Social Security surplus that Congress borrows will begin to shrink, forcing our government to look for additional sources for funding,

 In 2017 Social Security will begin to pay out more in benefits than is collected. 

 In 2041 Social Security will run out of it special issue bonds and the trust fund is exhausted.

 

Paid for by the Mark Mulligan for Congress Committee