Federal Budget Issues

Earlier this month Texas Gov. Rick Perry made waves when he called Social Security a Ponzi scheme during a Republican Party presidential debate, an assertion he originally made in his 2010 autobiography "Fed Up." In this video Rudolph G. Penner - an Institute Fellow at the Program on Retirement Policy and a former director of the Congressional Budget Office - explains what a Ponzi scheme is, how it compares with Social Security, and what can be done to fix the program's underlying structural problems.

The White House and Congress reached a deal in August 2011 to raise the debt ceiling and cut $2.1 billion in government spending over ten years. While big programs that affect Americans’ retirements were not reduced, they’re likely to take a haircut when a mandated 12-member, bipartisan, bicameral "super committee" makes its recommendations for at least $1.2 trillion in cuts in November. Steuerle explains what the debt ceiling deal accomplished, the political landscape and stakes faced by the "super committee," and the outlook for future and current retirees.

On May 13, 2011, the Social Security Board of Trustees will release an annual report detailing the current and projected financial status of the program, including the level of reserves in the Social Security trust fund. In this video Eric Toder, codirector of the Tax Policy Center, explains what the Social Security trust fund was designed to do, how it's actually used, and what observers will be looking for in the trustees' report.

What does matter is that Social Security expenses are expected to rise by about 50 percent—from about 4.3 to 6.3 percentage points of GDP—from 2008 to 2030, and taxes aren't. As the baby boomers retire, higher expenses and less tax revenue mean that the national deficit will rise year after year.

The March edition of the Program on Retirement Policy's video series features Kim Rueben, a senior fellow at the Tax Policy Center, explaining the reality of a typical state pension, how states are talking about reforming pensions, and the risks posed to the economic security of new, veteran, and retired state employees, as well as states themselves.