Economic Stimulus Package Would Place Social Security Trust Fund in Deficit for First Time Ever Next Year

/PRNewswire-USNewswire/ -- The Congressional economic stimulus plan would place the Social Security Trust Fund into deficit for the first time ever next year, if the current economic stimulus package is passed by both Houses of Congress.

Social Security is funded by payroll taxes that employees and their employers pay into the system. Money that comes into the Social Security Trust Fund is used to pay the Social Security checks retirees receive each month, and since the creation of the Trust Fund in 1983, the program has always had more money coming in than going out.

However, that may change as soon as next year, due to a proposed refundable payroll tax credit which would offer workers a refund on their portion of Social Security taxes, meaning there would be insufficient cash to pay benefits. The $145.3 billion refundable payroll tax credit proposal would give individual workers up to $500 and couples up to $1,000.

According to the 2008 Social Security Trustees Report, the estimated surplus under "high cost," or bad economic conditions, is as follows:

Year Social Security Trust *Payroll Credit Costs,
Fund Projected Surplus Proposed Legislation
(Billions) (Billions)
2009 $54 $24
2010 $57 $80.8
2011 $43 $37
2012 $26
2013 $5

* Source: Joint Committee on Taxation


"A sufficiently funded Social Security Trust Fund is critical in ensuring that seniors don't have to endure benefits cuts," said Daniel O'Connell, chairman of The Senior Citizens League. "Although we recognize the economy is in bad shape, we don't think putting the Trust Fund into the red is a responsible response."

The Senior Citizens League is advocating for any decrease in payroll taxes to be taken from the general treasury, not the Social Security Trust Fund.

Economic Stimulus Package Offers Little Help to Seniors in Poverty

/PRNewswire-USNewswire/ -- The U.S. Senate version of the economic stimulus package would provide Social Security recipients and disabled veterans a one-time extra payment of $300.

The Senior Citizens League (TSCL) supports the $300 payment to seniors, but maintains that amount is insufficient to truly help the nation's poorest seniors. The average Social Security beneficiary receives just $13,836 per year, and more than 10 percent of seniors live below the poverty line.

TSCL is advocating for as much as $1,000 in relief for the nation's poorest seniors - the same amount couples earning up to $150,000 per year would receive.

A recent study released by TSCL found that seniors lost 51 percent of their buying power since 2000, a result of costs increasing more rapidly than the Social Security Cost of Living Adjustment.

"It's difficult to understand why the Senate would give the least money to the most vulnerable group in our economy," said Daniel O'Connell, chairman of The Senior Citizens League. "It seems clear that seniors - especially those barely getting by - are precisely the people that will stimulate the economy by spending their stimulus checks."

"We receive phone calls from seniors every day who are having a tough time paying for their prescriptions, groceries, and rent - these are the very people who need the stimulus most," said Shannon Benton, executive director of TSCL.

TSCL is concerned with one part of the Senate proposal: since workers would not pay a portion of their Social Security taxes, the Social Security Trust Fund would go into deficit spending as soon as 2010. TSCL encourages lawmakers to take the money required for this tax relief from the general treasury rather than the Trust Fund.

With 1.2 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.