It’s 12.4% total, and it’s split equally between workers and the employers of those workers. The main way Social Security is funded is by a tax on wage income.
Kai Ryssdal: So for those who either never knew or have forgotten, a quick refresher, please, on how Social Security in this country is funded.ĭennis Jansen: Sure. The following is an edited transcript of their conversation. At the current rate of spending, the trust fund that supplements the income tax in financing Social Security payments will run dry within the next 10 years, dropping payouts by about 23%.ĭennis Jansen, an economics professor at Texas A&M University, wrote about the Social Security shortfall in a piece for The Conversation and joined Marketplace’s Kai Ryssdal to discuss it. Since 2010, Social Security, a program that 67 million Americans rely on and pays out more than $1 trillion annually, has been running a cash-flow deficit. The general Treasury, though, is not the only government account with cash-flow problems. They were resolved, for now, with a suspension of the debt limit until 2025. Congress just went through a monthslong discussion about the federal government’s liquidity challenges.
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