another victim of the recession: the Social Security surplus disappears

From Brian Doherty in Reason...

The “Social Security surplus” has vanished. That figure has long referred to the amount in Social Security taxes collected over and above the amount the system pays out that year. The federal government spends the leftovers every year, issuing itself an IOU rather than setting money aside for future liabilities. According to calculations from both the White House and the Congressional Budget Office (CBO), the year of reckoning when Social Security spending exceeds Social Security tax revenue has moved up from 2017 to…2009.

Kevin Hassett, an economist at the conservative American Enterprise Institute, is sounding the alarm about this under-covered side-effect of the recession...."Payroll tax receipts generally hold up much better in recessions than do income taxes, but job losses have been so severe that the CBO expects them to decline slightly from 2008, while benefits rise almost 9 percent because of cost-of-living adjustments and the beginnings of the baby-boomer retirement wave.”