Social Security Trustees Report Long-Range Financing
Outlook Remains Unchanged
Trust Funds exhausted in 2037, same as projected last year;
enter red ink in 2015
Aug.
6, 2010 - The Social Security Board of Trustees today released its
annual report on the financial health of the Social Security Trust Funds
and they say the long-range outlook remains unchanged. There was a
slight negative change, however, with costs now expected to permanently
exceed tax revenues beginning 2015, one year earlier than estimated in
last years report.
What stays the same is the projection that the
combined assets of the Old-Age and Survivors Insurance, and Disability
Insurance (OASDI) Trust Funds will be exhausted in 2037, the same as
projected last year.
The Trustees also project that program costs will
exceed tax revenues in 2010 and 2011, be less than tax revenues in 2012
through 2014. Then, beginning in 2015, the program will be continuously
in the red..
The worsening of the short-range outlook for the
Social Security Trust Funds is due in large part to the recent economic
downturn.
In the 2010 Annual Report to Congress, the Trustees
announced:
● The projected point at which the combined
Trust Funds will be exhausted comes in 2037 the same as the estimate
in last years report. At that time, there will be sufficient tax
revenue coming in to pay about 78 percent of benefits.
● The projected point at which tax revenues will
fall below program costs comes in 2010. Tax revenues will again exceed
program costs in 2012 through 2014 before permanently falling below
program costs in 2015 -- one year sooner than the estimate in last
years report.
● The projected actuarial deficit over the
75-year long-range period is 1.92 percent of taxable payroll -- 0.08
percentage point smaller than in last years report.
● Over the 75-year period, the Trust Funds would
require additional revenue equivalent to $5.4 trillion in present value
dollars to pay all scheduled benefits.
The impact of the current economic downturn
continues to be felt by the Social Security Trust Funds, said Michael
J. Astrue, Commissioner of Social Security.
The fact that the costs for the program will
likely exceed tax revenue this year is not a cause for panic but it does
send a strong message that its time for us to make the tough choices
that we know we need to make. I applaud President Obama for his
creation of the Deficit Commission so we can start the national
discussion needed to ensure that Social Security remains a foundation of
economic security for our children and grandchildren.
Other highlights of the Trustees Report include:
● Income including interest to the combined
OASDI Trust Funds amounted to $807 billion ($667 billion in net
contributions, $22 billion from taxation of benefits and $118 billion in
interest) in 2009.
● Total expenditures from the combined OASDI
Trust Funds amounted to $686 billion in 2009.
● The assets of the combined OASDI Trust Funds
increased by about $122 billion in 2009 to a total of $2.5 trillion.
● During 2009, an estimated 156 million people
had earnings covered by Social Security and paid payroll taxes.
● Social Security paid benefits of $675 billion
in calendar year 2009. There were about 53 million beneficiaries at the
end of the calendar year.
● The cost of $6.2 billion to administer the
program in 2009 was a very low 0.9 percent of total expenditures.
● The combined Trust Fund assets earned interest
at an effective annual rate of 4.9 percent in 2009.
The Board of Trustees is comprised of six members.
Four serve by virtue of their positions with the federal government:
Timothy F. Geithner, Secretary of the Treasury and Managing Trustee;
Michael J. Astrue, Commissioner of Social Security; Kathleen Sebelius,
Secretary of Health and Human Services; and Hilda L. Solis, Secretary of
Labor.
The two public trustee positions are currently
vacant. President Obama nominated two individuals to serve as public
trustees, and the Senate Finance Committee held hearings on July 29 for
both trustee nominees. Their confirmations are pending.
Aug.
6, 2010 - The Social Security Board of Trustees today released its
annual report on the financial health of the Social Security Trust Funds
and they say the long-range outlook remains unchanged. There was a
slight negative change, however, with costs now expected to permanently
exceed tax revenues beginning 2015, one year earlier than estimated in
last years report.
