Social Security To Be Exhausted By 2033

According to the report, the Disability Insurance (DI) Trust Fund will be exhausted in 2016, two years earlier than last year’s estimate. The report also projected that the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) program costs will exceed non-interest income in 2012 and will remain higher throughout the remainder of the 75-year period.

Also announced in the report:

•  The projected point at which the combined Trust Funds will be exhausted comes in 2033 – three years sooner than projected last year.  At that time, there will be sufficient non-interest income coming in to pay about 75% of scheduled benefits;

•  The projected actuarial deficit over the 75-year long-range period is 2.67% of taxable payroll—0.44 percentage point larger than in last year’s report;

•  Over the 75-year period, the Trust Funds would require additional revenue equivalent to $8.6 trillion in present value dollars to pay all scheduled benefits;

•  Income including interest to the combined OASDI Trust Funds amounted to $805 billion in 2011. ($564 billion in net contributions, $24 billion from taxation of benefits, $114 billion in interest, and $103 billion in reimbursements from the General Fund of the Treasury—almost exclusively resulting from the 2011 payroll tax legislation); and

•  Total expenditures from the combined OASDI Trust Funds amounted to $736 billion in 2011.

The report also said:

•  Non-interest income fell below program costs in 2010 for the first time since 1983. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period;

•  The assets of the combined OASDI Trust Funds increased by $69 billion in 2011 to a total of $2.7 trillion;

•  During 2011, an estimated 158 million people had earnings covered by Social Security and paid payroll taxes;

•  Social Security paid benefits of $725 billion in calendar year 2011. There were about 55 million beneficiaries at the end of the calendar year;

•  The cost of $6.4 billion to administer the program in 2011 was a very low 0.9% of total expenditures; and

•  The combined Trust Fund assets earned interest at an effective annual rate of 4.4% in 2011.

“This year’s Trustees Report contains troubling, but not unexpected, projections about Social Security’s finances.  It once again emphasizes that Congress needs to act to ensure the long-term solvency of this important program, and needs to act within four years to avoid automatic cuts to people receiving disability benefits,” said Michael J. Astrue, commissioner of Social Security.