Social Security Information Systems Near Collapse

matty619 writes "An Information Week article warns that the computer systems that run the Social Security Administration may collapse by 2012 due to increased workload, and a half-billion-dollar upgrade won't be ready until 2015. One of the biggest problems is the agency's transition to a new data center, according to a report (PDF) by the SSA's Inspector General. The IG has characterized the replacement of the SSA's National Computer Center — built in 1979 — as the SSA's 'primary IT investment' in the next few years."

Re:2012

[garompeta]

I am still amazed when I see people who think that the US is the world.
Isn't it amazing that whenever there is an alien invasion, they seem to invade the US first (or some times ONLY in the US). Bleh.

Re:*HOW* Much?!

[WarwickRyan]

Now I've RTA I do.. it's just talking about hardware..

Re:A good place for Gov. to be run like a business

[vlm]

1) Data acquisition (who has incrementally paid into the system) - this is B.S. accounting because it's all going to come from the general tax fund soon anyway, so why the charade?

They gather that data to verify eligibility and calculated benefit payout. Don't you get an annual statement listing what you earned for the past X years and if you were to become disabled you would get Y dollars per month, etc? I just got my annual statement on Friday.

They send this out annually because if the food store that I worked at in 1991 forgot to credit me with that income, its a heck of a lot easier to set the record straight in 1992 rather than waiting for me to retire or become disabled decades later and ooops I haven't paid in enough "fully qualified" years for whatever benefit.

Also if someone steals your SS number and works under it, you can trivially figure out how much money they earn, which is interesting.

Re:*HOW* Much?!

[DavidTC]

Um, you really need to actually check your assumptions. Because I don't know 'when your grandparents were around', but you're wrong. Just wrong.

Either you're talking about the great depression, when taxes, were, indeed lower, but no one was buying houses or putting people through college or, you know, eating real food...

...or 'your grandparents were around' during WWII when the tax rate was not only higher, no one was even allowed to build new homes because material went to the war effort, as did all the construction workers...

...or 'your grandparents were around' to be, oh, the 1950-1960, when the tax rates were higher.

There is one microscopic sweet spot of post-war, from 1945-1950, when the US was the only functioning economy, when the tax rates was slightly lower than current rates.

But they weren't lower than a decade ago when you hypothesis you could have been doing all these, so you're still wrong. Your grandparents had 5 years at that rate. You had a decade. (And we're talking maybe 3% lower than current rates.)

Re:Flash...

[deblau]

It's appropriate, since the entire "social security trust fund" is nothing but IOUs from a government that's deeper in debt than any other government has ever been in all of recorded history.

-jcr

But the US also has an economy that's larger than any other economy in recorded history. How large is the debt in proportion to the economy? How much of that debt is owed to the social security trust fund?

Year, Debt (in $B), Debt/GDP
2005 12638.4 62.77
2006 13398.9 63.49
2007 14077.6 63.99
2008 14441.4 69.15
2009 14258.2 83.29
2010 14623.9 94.27 (projected)

There were precisely six years in our nation's history when our debt-to-GDP ratio was over 90%: 1944-1949. Of course, we had a huge jobs program back then, which was pumping up the economy. We were able to leverage that momentum to pay down the debt to 50-year debt/GDP lows by the mid 1970s (although the absolute size of the debt kept increasing through that period).

Source: http://www.usgovernmentspending.com/federal_debt_chart.html [usgovernmentspending.com]

The net present value of total OASDI costs over the next 75 years is estimated to be about $5.3T, or about 37% of the present value of the debt. On the other hand, the net present value of Medicare part A costs over the same window is $13.4T, or 94% of the present value of the debt. As anyone who is familiar with the numbers will tell you, Medicare is a much larger and more immediate problem than Social Security.

Source: http://www.cga.ct.gov/2010/rpt/2010-R-0197.htm [ct.gov]

Next time, look up the numbers yourself, ya lazy bum.

Re:2012

[michael_cain]

Social Security has always been a pay-as-you-go system, regardless of the public's general misconception about it as "savings" or "investment". The current version of it, adopted from the recommendations of the 1983 Greenspan commission, does have the Boomer generation overpay -- but the commission's plan, which Congress promised to follow, was that the rest of the federal government would run a balanced budget, the national debt would slowly roll over into the SS trust fund, and when the Boomers retired those bonds would be paid for by borrowing from the public again. About the time the last of the Boomers died, the SS trust fund and the US public debt would sit where they were in the mid 1980s, adjusted for population, inflation, and productivity gains. Except for the balanced budget part, things are playing out very close to the commission's forecasts.

After the Boomers, the system reverts to complete pay-as-you-go, requiring a stable 6.2% of GDP. Everyone's forecasts for outlays shows them to be stable, from the SSA itself to the most conservative think tanks. Unfortunately, the commission assumed that future gains from productivity would be shared across the entire spectrum of income; if that had happened, the debate we would be having today would be regarding a permanent small adjustment of the SS tax rates down. But the productivity gains for the last 20 years have been largely captured by those making more than the SS cap, so are not being taxed. A small change in the cap formula, phased in over a decade, would erase the problem entirely.

Productivity gains are why it's not a Ponzi scheme. If you don't include such gains, you simply get the wrong answer.

Re:2012

[Anonymous Coward]

The perception is probably more the reality. Think about it for a min. They send out a statement every year saying what you will make when you retire per month. Mine stands around 1200 a month. Yet right now I pay about 400 a month in. Sounds 'ponzi' scheme like to me. I am also told over and over that there will be drastic cuts coming about the time I retire. So I *MAY* get my 400 a month back or not. However that means my ROI on that 400 a month will probably be close to 0 over 45 years. Hell a money market savings account would do better than that.

It is a wealth destroyer and I keep hearing about the risk of cuts (from my perspective as an 'investor' bad news...). The gov is taking the money from one group and giving it to another. It is a simple wealth redistribution program. Lets call it what it is. I contribute and do not grumble about it because I know it helps people. It is the leaches that take advantage of the program to not contribute to society that I despise. Find a local ghetto or trailer park trust me they know *exactly* how to get the most money from the gov. These people have a check list on how to 'make' 1200 bucks a month plus 400-600 in food stammps. You cant live great on that but you can live decently considering it is tax free. They even consider you stupid for bothering to go to school and not taking advantage of the system. The worst part is if you decide you are tired of 'leaching' you can not get out of it. The gov instantly takes the other money away. So you end up working your ass off and making exactly the same amount or less. Then if you listened to everyone around you how stupid school is, you probably do not have the education it takes to get a decent job.

This program in many ways is a good thing for our society and in many ways a bad thing.