Social Security and Medicare 237 And the numbers game keeps getting worse. By the time the Baby Boomers start retiring, it's ex- pected that there will only be two workers for every person receiving retirement benefits. We expect that it will be the Boomers' kids, the Gen X'ers, and they just might object to paying for Mom and Dad's "early-bird specials." Social Security is taking in more than it is paying out right now and is stashing the surplus into a trust fund invested in special U.S. Treasury bonds--in essence government IOUs. The trust fund reserves stood at $1,049 billion at the end of 2000. Sure sounds like there are enough dollars floating around to take care of a few old people. And that's true, except we've got those darn Baby Boomers coming through the system. And guess what? They're expecting their fair share of benefits. The predictions are that Social Security can continue to pay benefits from payroll taxes through 2016. After that, it will have to begin using the interest earned from its special treasuries to supple- ment payroll deductions. That money will last only about nine years, until 2025. After that, the Social Security Administration (SSA) will begin to need to redeem the bonds in the trust fund to supplement the intake of payroll taxes. Those bonds are expected to last until 2038. The Social Security Board of Trustees concludes that, even without any changes in current law, Social Security would be able to pay out benefits through the year 2038. At that time, the trustees estimate that the program will be collecting tax revenues of $2.2 trillion (that's 12 zeros, in case you're wondering), sufficient only to cover about three-fourths of the annual expenditures. So the system won't go broke, but it does need some fixing. For What It's Worth People worry a lot about the Social Security Administration, but expenses for administering all of the Social Security programs was $3.8 billion in 2000, or about 0.06 percent of benefits. That's better fiscal fitness than in most other federal agencies. Now, this is a best-guess estimate by the trustees, because they have made an assumption that the government will begin to redeem those accumulated bonds. But (and that's a big "but"), even the government has begun to worry about the pressure on the Treasury and the nation's economy when that happens. Who Knew? You can't blame the government (well, not completely) for all of the problems that have cropped up with Social Security's future deficit. Nobody 65 years ago had a crystal ball. For example: · Who knew that our life expectancy would increase, so that a healthy woman at age 65 now can expect to live to be 86 and a man to 83? · Who knew that retirees over 80 would be the fastest-growing segment of our population? · Who knew after the war that there would be so many babies born in such a short period of time? · Who knew that a demographic group like the baby boomers would play havoc with the planning efforts of a nation?