Lawmakers Are Desperate to Save Social Security, but This Solution Is Unlikely to Work
Social Security is in trouble. In April, the program's Trustees reported that Social Security's trust funds could run out of money by 2035. Once that happens, the program may have no choice but to cut benefits to compensate for a lack of revenue.
The bulk of Social Security's revenue comes from payroll taxes -- the ones everyone has to pay on earnings, up to a certain point. In the coming years, Social Security's primary revenue stream will shrink as more and more baby boomers end their careers and not enough people enter the workforce to replace them. As such, the program will owe more money in benefits than it can pay. It does have its trust funds to bridge that shortfall, but only for so long, and once those funds run dry, substantial benefit cuts may be on the table.
Of course, cutting benefits would be catastrophic to the many seniors who already rely on Social Security for the bulk of their income, and it could also be similarly harmful to future recipients who plan to do the same. As such, lawmakers are invested in a solution to prevent benefit cuts from happening, and increasing Social Security's primary revenue source -- payroll taxes -- has been a popular suggestion. But it's also a solution that's not nearly as feasible as it may seem.
Source Fool.com
