They have to collect more money, in order to pay the benefits that are already owed. It used to be that Social Securioty was NOT indexed for inflation. When Congress did that, they did NOT increase the amount to be paid, to make up the difference..
Congress also, in the early 1960's, began to spend every penny of Social Security taxes that came in, as a part of the regular budget. They issued "Treasury Bonds" for that money, essentially government IOU's. There IS NO SOCIAL SECURITY TRUST FUND, and there has not been one for over 50 years. It is all owed money, that has to be paid out of the income that is brought in each year.
The problem is, now there are way too many people getting benegfits, and not enough people working to pay the bill. SO, Congress has three choices:
1. Reduce benefits for everyone currently on Social Security and those that will get it in the future. That would be political suicide.
2. Reduce benefits, and have a later starting date for future retirees. Part of that is already happening, people are having to wait till 66 now, and 67 soon, to get full benefits.
3. Some how, bring in a lot more money, without changing anything. That is also happening, because more people will be paying because of the automatic increases in the amount that is taxed. BUT, Congress is going to have to effectively start charging Social Security taxes (FICA) on ALL earned income, without changing the amount that people can receive. They are also looking at setting an outside income limit, if you earn over a certain amount from any other source, your Social Security benefits will be decreased till it disappears.
It can't go on as it is, because it is set up in a way that is absolutely unsustainable. The irony is, I paid 5% of my income (and my employer paid 10%) into a TIAA-CREF retirement account for five years, when I was earning less than $20,000 a year (in the late 1970's and early 80s). I never paid another cent into that program, Now, I get 1/3 as much from that account as I get from paying into Social Security for over 50 years! I opted to have inflation [protection in my TIAA-CREF Retirement payment, so that IS indexed for inflation just as Social Security is (I start off with a lower monthly amount, but it is made up if I live for even 10 years).
Now, if TIAA-CREF can do that well, why can't our government?
The Old Medic
Retired Clinical Psychologist and Rehabilitation Counselor
Former Sergeant First Class, U.S. Army (1959-1969)