Social Security Tax Collection Falls With Job Losses

By: Associated Press Email
By: Associated Press Email

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Tuesday, March 31, 2009

The recession is having an impact on Social Security.

Job losses are cutting into Social Security tax collections so much, the retirement program is projected to pay out almost as much in benefits next year as it collects.

The Congressional Budget Office projects that the Social Security trust funds will collect just $3 billion more in cash receipts than they will pay out in benefits in the 2010 budget year that starts in October. A year ago, the CBO projected an $86 billion cash surplus for the same year.

The development will have little practical effect on the short-term operation of the program, thanks in part to interest income, as well as a $2.4 trillion balance in the Social Security trust funds.

But the shrinking surplus highlights future problems for a retirement system that has to accommodate the post-World War II baby boomers reaching retirement age.

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