“Social Security!” Do not be afraid: This s-word causes politicians to run for the hills, but for more than 40 million aging Americans, its literally like gold.

And that’s the whole problem. Addressing the Social Security issue is impossible for our elected officials. The veritable sacred cow of Washington is very sick, and Congress is unwilling to find a cure. But this sacred cow is becoming a bit like an elephant in the room–its too big to ignore. As Bloomberg reports:

In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, 4 years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago.

In reality, the money for both could run out at any moment, because both depend on income from paychecks. At this time, payrolls are at a minimum while unemployment insurance claims hit a record. The 2008 Trustees’ Report on Social Security is a real eye-opener. According to Scott Burns at MSN Money,

In the four years from Jan. 2004 to Jan. 2008, the Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. But the average annual growth was only $2.5 trillion. Ironically, payroll tax payments are still large enough that the Social Security and Medicare programs don’t need every dime. The extra money goes into the program trust funds as Treasury debt. The actual cash is spent elsewhere. Basically, the employment tax has been subsidizing other federal spending. This has been going on since the last “reform” of Social Security in 1983, a disaster chaired by Alan Greenspan.

This is why the trustees say Social Security will go bankrupt in 2037. Enough money is coming into the fund, but we cannot count on Congress to save a dime: our Social Security is being spent on other things. If current practices continue, however, we have to face a dire truth:

Last year’s Social Security trustee report says that Social Security and medicare hospital insurance, excluding book entry interest for the trust funds, will have more revenue than expenses until 2015. If higher cost assumptions prevail, however, the last year of positive flow will be 2010.

That’s right. Next year. It could be this year if payrolls drop as severely as they have been doing lately. In that case, Social Security will have to borrow from other government funds for the first time. No longer will We the Peoples’ retirement aid be every other agency’s slush fund.

To save Social Security, it first requires a strong economy with plenty withholdings from paychecks, followed by drastic changes in payout rules and fund management. Al Gore’s annoying “Lock Box” phrase from the 2000 presidential election was actually a good idea, since Social Security funds are borrowed against every day. Small wonder it’s unstable!

Rep. Rosa DeLauro has been on the wrong side of Social Security and Medicare reform her entire career. In fact, while the date of Social Security’s collapse was being predicted, she called it “the most successful retirement program in history”. If the Congresswoman truly believes this, then why is she unwilling to tackle the fundamental problems facing Social Security? Frankly, it is inexcusable, and one more reason to Retire Rosa, and hire Boaz ItsHaky in 2010 to save our retirement!

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