Issue link: https://www.epageflip.net/i/556412
ByStephenOhlemacher The Associated Press WASHINGTON SocialSecu- rity turns 80 on Friday, and the massive retirement and disability program is show- ing its age. Social Security's dis- ability fund is projected to run dry next year. The re- tirement fund has enough money to pay full benefits until 2035. But once the fund is depleted, the short- falls projected to be enor- mous. The stakes are huge: Nearly 60 million retirees, disabled workers, spouses and children get monthly Social Security payments, and that number that is pro- jected to grow to 90 million over the next two decades. And the timing is bad: Social Security faces these problems as fewer employ- ers are offering traditional pensions, forcing older workers to think hard about how they will afford retire- ment. "This is a program that's been immensely popular since it began," said Nancy LeaMond, executive vice president of AARP. "In- creasingly, people recog- nize that saving for retire- ment is becoming harder and harder, and Social Se- curity is becoming even more important." President Franklin Del- ano Roosevelt signed the Social Security Act on Aug. 14, 1935. Here are things to know about the federal gov- ernment's largest program on its 80th birthday: Whyisitatrisk? Social Security's long- term financial problems are largely a result of de- mographic changes. Every day, about 10,000 people in the U.S. turn 65. These are the baby boomers. Typical boomers, how- ever, didn't have as many children as their parents did. As a result, relatively fewer workers are left to pay the payroll taxes that sup- port Social Security. In 1960, there were more than five workers for ev- ery person receiving So- cial Security. Today there are fewer than three. In 20 years, there will be about two workers for every per- son getting benefits. Americans are also liv- ing longer. In 1940, some- one who was 65 could be expected to live about 14 more years, on average. To- day, they can expect to live an additional 20 years, on average. Benefits Last year, Social Secu- rity paid benefits of nearly $850 billion— about a quar- ter of all federal spending. The average monthly pay- ment is $1,221. That comes to about $14,700 a year. For most retirees, Social Security accounts for the majority of their income, according to the Social Se- curity Administration. 2016 The trust fund that sup- ports Social Security's dis- ability program is pro- jected to run dry in late 2016 — right in the middle of the presidential election. If Congress allows that to happen, it will trigger an automatic 19 percent cut in benefits to the 11 million people who receive Social Security disability. Lawmakers could redi- rect tax revenue from So- cial Security's much bigger retirement program, as they have done in the past. If the tax revenue were redirected, the retirement fund would lose one year of solvency, so both the re- tirement program and the disability program would have enough money to pay full benefits until 2034. At that point, Social Security would collect enough in taxes to pay 79 percent of benefits. Republicans are balk- ing at the fix. They see the funding crisis as an oppor- tunity to improve a disabil- ity program that they be- lieve is plagued by waste and abuse. "Social Security retire- ment funds have been raided far too many times for far too many years," said Rep. Tom Reed, R-N.Y. Reed sponsored a rule adopted by House Republi- cans that would prevent the House from redirecting the tax revenue without mak- ing changes to improve the overall financial health of Social Security. Democrats are much more eager to defend the disability program, not- ing that its modest benefits keep millions of disabled workers and their families out of poverty. "The issue is whether you're going to cut services and benefits to Americans who paid for them by say- ing that the Social Security program doesn't have the money, when in fact it has nearly $3 trillion," said Rep. Xavier Becerra, D-Calif. "It manufactures a crisis." Becerra has introduced a bill that would merge Social Security's trust funds. Long-term problem The numbers are beyond comprehension. Social Security uses a 75- year window to forecast its finances, so the projections cover the life expectancy of every worker paying into the system. Over the next 75 years, Social Security is pro- jected to pay out $159 tril- lion more in benefits than it will collect in taxes, accord- ing to agency data. That's not a typo. Adjusted for inflation, the shortfall comes to $35.3 trillion in 2015 dollars. That's nearly twice the na- tional debt, which took the entire federal government 239 years to accumulate. Already spent Yes. For much of the past three decades, Social Se- curity produced big sur- pluses, collecting more in taxes than it paid in bene- fits. Social Security invested those surpluses in special U.S. Treasury bonds, which are backed by the full faith and credit of the U.S. gov- ernment. They are now valued at $2.8 trillion. But as Social Security was generating surpluses, the rest of the federal gov- ernment was running defi- cits, for all but a few years around the turn of the cen- tury. To finance deficit spend- ing, the Treasury borrowed from the public and from other federal programs, in- cluding Social Security. Didn't Congress fix social security under President Reagan? Yes. Social Security was on the brink of insolvency in the early 1980s when Congress and President Ronald Reagan agreed to gradually increase pay- roll taxes and to reduce benefits, in part by gradu- ally raising the retirement age. Those changes didn't permanently fix Social Se- curity, but they provided enough revenue to pay full benefits for about 50 years. In today's political cli- mate, another feat like that would be historic. PROJECTED SHORTFALLS SocialSecurityshowingagea er80years THEASSOCIATEDPRESSFILE President Franklin Roosevelt signs the Social Security bill in Washington, D.C. in 1935. By Pat Eaton-Robb The Associated Press HARTFORD, CONN. Con- necticut's highest court on Thursday ordered the state's death row emp- tied out, ruling that the 2012 law abolishing capi- tal punishment for any fu- ture crimes must be ap- plied to the 11 men fac- ing execution for offenses they committed before the measure took effect. In a sharply divided 4-3 ruling, the court declared the death penalty violates the state's constitution, "no longer comports with contemporary standards of decency and no longer serves any legitimate pe- nological purpose." "This is a strong deci- sion and I think it's going to be very helpful nation- ally," said Michael Court- ney, who heads the capital defense unit for Connect- icut's Office of the Pub- lic Defender. "The United States Supreme Court may consider these very issues under the federal constitution in the fall." The court's ruling cited factors that have come up in other states to abolish the death penalty includ- ing racial and economic disparities, the costs in- volved with appeals, the cruelty of the wait for ex- ecution and the risk of ex- ecuting innocent people. "They went at this from multiple angles in a way that is going to provide ammunition for abolition- ists across the country," said David McGuire, an attorney with the Ameri- can Civil Liberties Union of Connecticut. Opposition to the death penalty has been grow- ing in the United States. 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