Social Security Payouts to Exceed Revenues

For the first time, payouts made under the U.S. Social Security system will exceed the federal government's revenues, according to a Thursday report in the New York Times.

If the Congressional Budget Office's prediction bears out, it will represent a major tipping point for the Social Security system which analysts didn't expect to see until 2016, according to the Times report.

Stephen C. Goss, chief actuary of the Social Security Administration, told the Times that the CBO's estimate was likely accurate, but that the tip in finances would not effect recipients in 2010, and America's retired workers can expect to continue receiving their payments.

Goss said the recession was to blame for the shift in revenues, and payouts. He told the Times that increasing numbers of Americans applied for Social Security benefits during the last year, as they lost their jobs amid nationwide layoffs.

As demand increased, funding decreased thanks to fewer people in gainful employment paying income taxes into the system.

According to the report, Social Security coffers will dry up by 2037 if the system's financial balance remains the same.

Alan Greenspan, who crafted a plan to bail out the cash-starved retirement infrastructure during an earlier crisis in the 1980s, tells the Times, "very much the same issue exists today."

"Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years," Greenspan told the paper.

  • Tucker Reals

    Tucker Reals is the foreign editor, based at the CBS News London bureau.