Carlos Osorio / AP

Marge Youngs of Toledo, Ohio, says Social Security makes up most of her income. She is worried that the program will be in trouble when her children and grandchildren need it.

WASHINGTON - As millions of baby boomers flood Social Security with applications for benefits, the program's $2.7 trillion surplus is starting to look small.
 
For nearly three decades Social Security produced big surpluses, collecting more in taxes from workers than it paid in benefits to retirees, disabled workers, spouses and children. The surpluses also helped mask the size of the budget deficit being generated by the rest of the federal government.
 
Those days are over.
 
Since 2010, Social Security has been paying out more in benefits than it collects in taxes, adding to the urgency for Congress to address the program's long-term finances.
 
"To me, urgent doesn't begin to describe it," said Chuck Blahous, one of the public trustees who oversee Social Security. "I would say we're somewhere between critical and too late to deal with it."
 
The Social Security trustees project the surplus will be gone in 2033. Unless Congress acts, Social Security would only collect enough tax revenue each year to pay about 75 percent of benefits, triggering an automatic reduction.
 
Lawmakers from both political parties say they want to avoid such a dramatic benefit cut for people who have retired and might not have the means to make up the lost income. Still, that scenario is more than two decades away, which is why many in Congress are willing to put off changes.
 
But once the surplus is spent, the annual funding gaps start off big and grow fast, which could make them hard to rein in if Congress procrastinates.
 
The projected shortfall in 2033 is $623 billion, according to the trustees' latest report. It reaches $1 trillion in 2045 and nearly $7 trillion in 2086, the end of a 75-year period used by Social Security's number crunchers because it covers the retirement years of just about everyone working today.
 
Add up 75 years' worth of shortfalls and you get an astonishing figure: $134 trillion. Adjusted for inflation, that's $30.5 trillion in 2012 dollars, or eight times the size of this year's entire federal budget.
 
In present value terms, the Social Security Administration says the shortfall is $8.6 trillion. That means the agency would need to invest $8.6 trillion today, and have it pay returns of 2.9 percent above inflation for the next 75 years, to produce enough money to cover the shortfall.
 
That's the rate of return Social Security expects to get from its trust funds. The problem, of course, is that Social Security doesn't have an extra $8.6 trillion to invest.
 
Social Security Commissioner Michael J. Astrue said he is frustrated that little has been done to solve a problem that is only going to get harder to fix as 2033 approaches. If changes are done soon, they can be spread out over time, perhaps sparing current retirees while giving workers time to increase their savings.
 
"It won't be easy but it's just going to get harder the longer they wait," Astrue said.
 
There is no consensus in Washington on how pressing the problem is.
 
President Barack Obama created a deficit-reduction commission in 2010 but didn't embrace its plan for Social Security: raising the retirement age, reducing benefits for medium- and high-income workers and raising the cap on the amount of wages subject to the payroll tax, all very gradually.
 
The issue has been largely absent from this year's presidential election. Neither Obama nor his Republican opponent, Mitt Romney, has made it a significant part of the campaign.
 
Blahous, a Republican, warns that the magnitude of the problem is becoming so great that "Social Security's days as a self-financing program are numbered" if Congress doesn't act in the next few years. Democrat Robert Reischauer, Social Security's other public trustee, is less dire in his predictions but has told Congress that it needs to act within five years.
 
Others express less urgency.
 
"I would like to see Congress move on this tomorrow but we do have 22 years before there is any cut in Social Security benefits," said Sen. Bernie Sanders, a liberal independent from Vermont who heads the Senate Social Security caucus. "Compared to other crises — the collapse of the middle class, real wages falling for American workers, 50 million people having no health insurance — how would I rate the Social Security situation? Nowhere near as serious as these and many other problems."
 
AARP, the nation's most powerful lobbying group for older Americans, agrees.
 
"I'm not suggesting we need to wait 20 years but we do have time to make changes to Social Security so that we can pay the benefits we promised," said David Certner, AARP's legislative policy director. "Let's face it. Relative to a lot of other things right now, Social Security is in pretty good shape."
 
Social Security is financed by a 12.4 percent tax on wages. Workers pay half and their employers pay the other half. Self-employed workers pay the full amount.
 
The tax is applied to the first $110,100 of a worker's wages, a cap that rises each year with inflation. For 2011 and 2012, the tax rate for employees was reduced to 4.2 percent but is scheduled to return to 6.2 percent in January.
 
Social Security's finances are being hit by a wave of demographics as aging baby boomers reach retirement, leaving relatively fewer workers behind to pay into the system. In 1960, there were 4.9 workers paying Social Security taxes for each person getting benefits. Today, there are about 2.8 workers for each beneficiary, a ratio that will drop to 1.9 workers by 2035, according to projections by the Congressional Budget Office.
 
About 56 million people collect Social Security benefits, and that is projected to grow to 91 million in 2035. Monthly benefits average $1,235 for retired workers and $1,111 for disabled workers.

Interactive: How would you fix Social Security?
 
Marge Youngs, a 77-year-old widow from Toledo, Ohio, said Social Security makes up most of her income. She's reasonably sure that Social Security's financial problems won't affect her benefits but worries about her children and grandchildren.
 
"We might not have to worry about it, but it's the next generation coming up that will," Youngs said.
 
Corryn Grace Freeman, 22, a recent college graduate from Columbia, Md., said she understands the federal government must address its growing budget problems but worries that her generation will be "penalized" for being born late.
 
"It's like we're paying for the current elderly, we have to save more for ourselves, and we don't get any help in the future," Freeman said. "And not to mention we're facing one of the toughest job markets that the U.S. has been faced with." 

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Ruthless ID thieves are robbing identities even from the grave, a new study has found.

Nearly 2.5 million dead people are victims of identity theft every year, according to a data analysis by fraud prevention firm ID Analytics being made public Monday.

The study offers the first hard data about a little-understood aspect of ID theft that can cause unnecessary pain and suffering to family members already dealing with loss.

ID Analytics works with dozens of credit-granting companies, such as banks and cellphone providers, to find common patterns among fraudsters as they fill out credit applications. The firm has unique insight intro fraud trends, as it screens more than 1 billion such applications annually. For this study, it considered 100 million applications filed during the first three months of 2011 and compared Social Security numbers and other information in those applications against the Social Security Administration's Death Master File, which tracks the identities of people after they die.

Stephen Coggeshall, chief technology officer at ID Analytics, recently crunched those numbers to look for evidence that criminals were exploiting SSNs attached to the deceased. The results showed a wide-scale problem, much larger than previously believed.

Roughly 800,000 deceased Americans are deliberately targeted by criminals each year, the study claims.

In those cases, an imposter armed with a deceased person's SSN, name and birthday tries to fully assume the dead person's identity. ID Analytics has no information about whether or not the attempts were successful, Coggeshall said — only that the personal information was used on an application during a fraud attempt.

Meanwhile, SSNs attached to 1.6 million more dead adults find their way onto thieves' fraudulent applications through random selection, he said. Many criminals simply guess at SSNs when filling out fraud applications and accidentally use one that's already been issued to someone who's now dead. ID Analytics calls them "identity manipulators" who make arbitrary variations on their own personal information to avoid fraud detection tools and randomly pick an SSN associated with a deceased person.

"This study brings to light a significant problem, as we see fraudsters intentionally using identities of the deceased at the rate of more than 2,000 per day," Coggeshall said.

Imposters who exploit the dead are after the same things that all ID thieves crave: theft of cellphone service or the ability to open up new credit cards or take out loans, Coggeshall said.

There are obvious advantages for criminals when using a dead person's personal information. If the fraud is initially successful, because the normal channel for discovery — a consumer who notices unauthorized charges or accounts on his or her credit history — doesn't exist. Family members or others disposing of an estate can discover the fraud through the arrival of unexpected bills, but the usual hurdles for recovering from such fraud are even higher when a third party must call and ask for corrections.

Fighting ID theft of the dead should be easier than most other forms of identity fraud. The Social Security Administration frequently updates the Death Master File, which now contains about 40 million SSNs. Firms that issue credit should routinely check their applications against this simple list; several inexpensive products offer this service, and the file is available in several forms online (there's even an app). But clearly, that kind of screening isn't happening, Coggeshall said. Otherwise, criminals wouldn't be trying to exploit the dead so frequently.

Ironically, if companies don't check SSNs against the Death Master File, it becomes a great source for criminals to obtain identities and SSNs to be exploited.

"We have no sense of where criminals are getting the numbers, but a certain portion of them probably are coming from public sources, like the Death Master File," Coggeshall said.

The study also hinted that seriously ill people are being targeted by criminals. There were 2 million cases of SSNs' being used in credit applications, with the SSN holder dying within the next two months.

"Certainly a good deal of this is not suspicious, but some fraction of these applications may be the misuse of the identities of the dying," Coggeshall said.

RED TAPE WRESTLING TIPS
Family members already dealing with a tragedy have plenty to worry about, but identity theft of the dead is a reality they must consider, he said.

"While this is clearly a problem for businesses, surviving family members can also be the victims of this identity fraud as they are left to manage the estates of their deceased loved ones," Coggeshall said. "It's important for people to monitor their deceased family members' identities for at least one year."

It's possible for a third party, such as a spouse, to get a credit report for a deceased person, but it's not trivial. The bureaus will want a death certificate as proof the individual has died, and they'll want some evidence that the requester has a right to see the information — such as a marriage license or an order showing he or she is an executor of the estate. That person can request that a "deceased — do not issue credit" notation be placed on the report, but certain hiccups can occur. If a credit account, such as a loan, is in both spouses' names, a "deceased" flag can occasionally cause confusion.

There's a good discussion of this issue on Experian's website.

More details on how to freeze a loved one's credit report are available at this BankRate.com story.

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Two people have been arrested and accused of kidnapping, starving and beating a disabled woman in a Queens home for more than a year, police say.

Police found the 58-year-old victim inside the Rockaway Park home last Thursday, after her niece in Pennsylvania became concerned she hadn't heard from her in months.

The victim was found locked in an empty room that could only be opened from the outside,  huddled on the floor, bleeding from the head and malnourished, authorities said.

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She was taken to a hospital with broken ribs, a broken arm, a dislocated shoulder and other injuries.

Authorities said Patrick Donovan, 42, and Mae Washington, 63, repeatedly beat the victim with their fists and with a cane, locked her in a room and sometimes bound her with tape.

She was also forced to clean up after their dog and multiple cats, even though she is partially paralyzed on the left side of her body, authorities said. 

The couple also stole her Social Security checks and cashed them, authorities said.

"I'm devastated," the victim's niece, Deborah Patton, told NBC New York in a phone interview. "I can't believe a human being could treat another human being like that."

The victim had been living with the couple since January 2011, when she was approached by them while at an assisted living facility, the Queens prosecutor's office said. They convinced her to rent space with them to save money.

The victim is now recovering in the hospital.

Washington and Donovan have been charged with kidnapping, assault and endangering the welfare of a disabled person. This was their second arrest this month; they were previously arrested for burglarizing their neighbor.

The two remain jailed with no bond. If convicted, they face up to 25 years in prison. They're expected to return to court in April.

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