In the face of dire forecasts over the future of the Social Security Retirement, Survivor and Disability trust funds the Congress passed in early February and President Obama signed legislation that will extend through the end of 2012 the “temporary” Social Security payroll tax deduction designed to help the nation get out of recession.
The 2% reduction in the employee’s portion of the 6.4% Social Security payroll tax to 4.4% on income up to $110,100 is continued from 2011. Above that amount only the Medicare payroll tax is deducted from earned income. The employer’s portion is still the full 6.4%.
The Disability Insurance Trust Fund is now estimated to be insolvent by 2017. The Old Age, Survivor’s and Disability Trust Fund will be insolvent, without changes, in 2018. The estimates on the exhaustion of the two Trust Funds vary but full benefits are expected to be paid through 2027 & 2028, respectively.
So it especially ironic that in the name of fiscal responsibility the solvency of the Social Security system is being sabotaged by our elected leaders of both parties, especially when politics seems to have trumped bi-partisanship in virtually every other area.
Election year politics over rules common sense.