Social Security was created in 1935 to help financially protect the elderly who were no longer able to work. But as America’s population ages, the generational demographic shift has threatened its viability.
The Social Security trustees’ 2014 report found that the Social Security and Disability Insurance Trust Fund will be able to pay its debts until 2034. As a whole, the program’s unfunded liabilities increased to $13.4 trillion, and the Disability Insurance Trust Fund will only be solvent until 2016.
In 1950, when Social Security had only been in existence a short time, there were over 15 workers for every retiree receiving benefits. Currently there’s less than three workers supporting each retiree and the decline is expected to continue, coinciding with Social Security’s insolvency. These numbers matter because Social Security benefits aren’t saved in some account earmarked for each beneficiary. Rather, they are dispensed every year from payroll tax revenue.
There are about eight million unauthorized immigrants working in the U.S., and nearly 40% of those workers pay Social Security taxes contributing about $12 billion in revenue. The President’s executive orders on immigration were structured to allow some of these workers to acquire work permits and Social Security numbers. As these workers eventually collect benefits, proponents of this bill contend that it could weaken the program’s finances in the long-term despite a short-term improvement in tax revenue.
Media:(Photo Credit: Flickr user Charlie Kaijo)