One more time all together, anyone saying Social Security is broken is selling you a special kind of deficit hawk nonsense:
The most important take-away points from the 2012 Trustees Report will be that Social Security has a large and growing surplus; that without any Congressional action, Social Security will continue to pay benefits to America’s eligible working families for decades; and that with modest legislated increases in revenue, it will continue to pay those benefits for the next century and beyond.
With the issuance of the 2012 report, journalists will have an opportunity to correct the common misunderstanding that Social Security is now paying out more in benefits than it is collecting in income. Social Security is prohibited by law from doing that, and if there were less income than outgo this year, the Trustees would be announcing an immediate cut in benefits. They are not.
Journalists can clarify that Social Security has three revenue sources: Payroll contributions from employers and employees, interest earned on Social Security’s U.S. Treasury bond holdings (which have the same legal standing and status of all other Treasury bonds issued by the government), and income taxes on the Social Security benefits paid by those with higher incomes.
Social security will be around for a while and if there are major problems with revenue, the trustees have tools to automatically adjust output.