ROXANNE LARAIA Open Ended Response #2

Question: In recent decades entitlement programs have constituted a substantial portion of the United States federal budget. Social Security is the largest entitlement program in the United States. From the information in the chart and your knowledge of United States government and politics, perform the following tasks.

Part A: a.) Define entitlement program - An entitlement program is a federal program that guarantees a certain level of benefits to a person or other group who meet the requirements set by law (i.e. Social Security)

Part B: b.) What is the primary source of revenue for the Social Security Program - Social Security is funded by dedicated pay roll taxes called Federal Insurance Contributions Act (FICA).

Part C: c.) Identify one threat to the future of the Social Security program, should the trends depicted in the chart continue? - The recent tax cuts to payroll taxes lowered from 6.2% to 4.2%, nearly 30 percent decrease. Since it will expire in a year workers will have to deal with big tax hikes, up to 50%, when the rate has to return to the norm.

Part D: d.) Describe one demographic trend that threatens the future of the Social Security Program AND describe how it is responsible for the threat that you identified in (c.) - Baby Boomers turning Social Security required age and putting unneeded strain on Social Security (in addition to the high taxes, and less funding)

Part E: e.) Explain how one of the trends in the chart above would change if the age of eligibility for Social Security were raised. - The “Paid Out” section of the graph will not raise so much and at such a fast rate if the age requirement for Social Security benefits is also raised.