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Social Security Administration Research Paper

Social Security Administration (SSA) is an agency of the federal government of the United States charged with administering the Social Security. The Social Security is a social insurance program that consists of retirement, disability, and survivors benefits. For a person to qualify for the program benefits, they must remit Social Security taxes. The employees' contributions determine all benefits. The SSA was established in August 14, 1935 as the Social Security Board. SSB was renamed to SSA in July 16, 1946. SSA was an independent agency when it was established, but in 1939, it became a sub-cabinet agency. It remained in this status until 1995 when it regained its independent status. The current commissioner for the SSA is Carolyn W. Colvin (Acting) who succeeded Michael J. Astrue. She was sworn in on February 14, 2013. Social Security is considered the largest social welfare program that constitutes of 37% of the United States government expenditure and 7% of GDP. Before the establishment of the Social Security Act, support for the elderly fell on states, towns and families. Social Security current situation

The trust fund for Social Security is estimated to become exhausted in 2033 (Evans, Perdue and Phillips). This was the same prediction in the previous year. 59 million people receive Social Security benefits each year, and each day around 10,000 baby boomers are eligible. According to administration officials, if the trust funds are depleted they can pay three-fourths of the benefits from payroll taxes and other revenues. It is reported that the contributions made to the Social Security Trust Fund increased by $32 billion in 2013. The trustees are anticipating another surplus for 2014, which has allowed them to project some increases in Social Security benefits starting in 2015. This would increase the total reserves by end of 2014 to $2.8 trillion. The Social Security benefits...

The number of baby boomers beneficiaries is increasing, which is having a hge effect on the trust funds. The deficit faced by the trust fund amounts to $3.7 trillion, which is spreads over 75 years. It is evident that the number of aging people is increasing, and the workforce numbers are decreasing. This places a huge burden on the workforce to sustain the trust fund. Ensuring that the reserves are fully funded will reduce the gaps and ensure that the trust fund is more sustainable. The projections of trust fund depletion are based on the individual earnings remaining the same. With changes to the law, it is possible that the fund can increase its reserves, which would guarantee its viability into the future.
Economic impact of the funds depletion

The elderly would not be able to provide for themselves, which would mean they would have to rely on their families. Depending on their families would result in hardships for the providers as their responsibilities would increase. In order for the government to cater for the retiree's benefits, the working groups would be highly taxed, which would reduce their overall earning, and spending would be reduced. The retirement would be increased, which would mean the country has an older workforce and productivity would decrease. Increasing the retirement age would result in less hiring taking place, and the younger generation would not have work. The rate of crime could increase, and this would affect the economy negatively. The number of baby boomers attaining retirement age is increasing each day and raising the retirement age would reduce the number of people dependent on the Social Security benefits. Since the cost of Social Security is increasing faster than the tax income collected, it is vital that the retirement age be increased.

If the funds were depleted, there would…

Sources used in this document:
References

Bakija, Jon, Adam Cole, and Bradley T. Heim. "Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from Us Tax Return Data." Williamstown: Williams College (2010). Print.

Behaghel, Luc, and David M. Blau. "Framing Social Security Reform: Behavioral Responses to Changes in the Full Retirement Age." American Economic Journal: Economic Policy 4.4 (2012): 41-67. Print.

Evans, Richard W, Jeremy Perdue, and Kerk L. Phillips. "When Will the Social Security Trust Fund Run Out? Linearization About the Current State." (2012). Print.
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