A Social Security Administration (SSA) news release said the combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are, once again, projected to be exhausted in 2037 when there will be enough tax revenue coming in to pay about 78% of benefits.
However, the Board reported that the nation’s economic downturn has had an impact on its short-term estimates for the Social Security funds. According to the report, program costs will exceed tax revenues in 2010 and 2011, be less than tax revenues in 2012 through 2014, and then permanently exceed tax revenues beginning 2015. That’s one year earlier than estimated in last year’s report.
“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 it’s time for us to make the tough choices that we know we need to make.”
According to the announcement, the Trustees also revealed in their 2010 Congressional report that:
- The projected actuarial deficit over the 75-year long-range period is 1.92% of taxable payroll — 0.08 percentage point smaller than in last year’s 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.
- 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 0.9% of total expenditures.
- The combined Trust Fund assets earned interest at an effective annual rate of 4.9% in 2009.
After the report release, AARP released a statement calling for “modest adjustments” to the program: “Today’s report from the Social Security Trustees reaffirms that the program is financially strong in the short-term and can be strengthened for the future with relatively modest adjustments. With pensions, savings, investment values and home equity down, with many older workers unable to find jobs, and with health costs continuing their upward climb, Social Security’s guaranteed benefits are more crucial than ever.”
More information about obtaining a copy of the report is at http://www.socialsecurity.gov/OACT/TR/2010/.