Social Security trust fund faces depletion

Federal officials are beefing up efforts to address the anticipated depletion of U.S. Social Security trust funds in order to ensure social security benefits are continuously made available to Americans both in the mainland and in the CNMI.

U.S. Social Security Administration Manager Michael G. Newman told a Saipan Rotary Club luncheon at the Hyatt yesterday that there are about 3,000 individuals in the CNMI who are active recipients of social security benefits today.

The SS trust fund, which currently holds at about a trillion dollars, is projected to continue sustaining the delivery of benefits to the system’s millions of beneficiaries until the next 25 years, disclosed Mr. Newman.

“The depletion of the trust fund is not really imminent. It won’t go down to a precariously low balance for at least 25 more years. But as early as now, steps should be taken. It’s time to decide what measures should be taken to make sure that the trust fund doesn’t deplete. So that’s why people are talking about it now so that we will have more time to decide what we’re going to do,” he said.

Mr. Newman said citizens through their elected representatives should start framing viable recommendations that would prevent exhaustion of the trust fund.

One possible move would be to raise the retirement age to enable the Social Security agency to save more money by paying recipients a little later in life.

“Another way would be to revise the formula by which benefits are computed and pay out a little bit less,” he said, adding that raising taxes could also pump more money into the trust fund.

But Mr. Newman warned the enumerated proposals would, in one way or another, ricochet on either the taxpayers or social security beneficiaries.

“None of these are very popular as each one of them hurts somebody. If we raise the taxes, the workers will be affected. If you lower the benefits, then the retirees are going to feel it,” he said.

The Social Security manager for the Saipan Field Office also admitted there is no simple solution to the long-term problem.

“This is one of the reason why in this presidential campaign in the U.S., we saw so much debate about Social Security. But it’s good that we’re talking about it in advance so that we can do something before the situation becomes critical,” he said.

The U.S. Social Security Administration came to the CNMI on Jan. 1, 1987, a merger of the trust territory social security system and the CNMI social security system.

Social Security provides a minimum “foundation of protection” for retired workers, and for workers and their families who face a loss of income due to disability or the death of a family or wage earner.

More than 150 million workers are protected by Social Security.