The timing also illustrates the problem with running such an enormous deficit, as mentioned here before. It prevents the government from being able to deal with new issues and pressures.
But you can't just blame the Democrats. The Republicans had plenty of opportunity, but took no action -- and yes, they had to opportunity to place Social Security on a sound footing, but failed to do so.
Just another example of the irresponsibility of our political class. Of course, they are getting rich, and everything is fine for them, thank you for asking.
msnbc: Social Security needs Uncle Sam's IOUs — now
Government expected to borrow more, especially abroad, to start payback
This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.
Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.
Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating.
Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.