The Entitlement Hoax
BusinessMay 11, 2011
Social Security has nothing to do with the federal deficit. Nothing. It is, has and will be in the black, self-financed and not dependent upon tax revenues. With no congressional action whatsoever, Social Security can pay all benefits on time and in full until 2037 and at least three-quarters of scheduled benefits through 2084.
Social Security is a defined benefit pension plan sponsored by the federal government, funded primarily with dedicated contributions of workers matched by their employers. Social Security has no borrowing authority and so does not and cannot contribute to the federal deficit. It will be in balance for the next 26 years, even if current policy continues unchanged.
The dedicated contributions are part of the payroll taxes that are taken from the paychecks of every working person. The “FICA” people see on their pay stubs stands for Federal Insurance Contributions Act, a law that requires both employees and employers to fund Social Security and Medicare. Federal social insurance taxes are imposed equally on employers and employees, consisting of a tax of 6.2% of wages up to an annual wage maximum of $106,800, plus a tax of 1.45% of total wages. The employee’s