No News Again in the Social Security Trustees Report

Every year when the Social Security Board of Trustees releases its annual report on the program’s financial and actuarial status, media stories convey warnings that the system is in trouble. Actually, though, this year’s report, like those released in the past, reaffirms that Social Security’s finances remain sound. That’s too boring a fact to inspire reporters, especially when plenty of sources can be found who are hostile to government and would love to cut the nation’s most successful program. But the United States has many, many far bigger worries than the condition of Social Security.

The new report shows that if nothing is done to change Social Security, the system will be able to continue to pay out promised benefits in full until 2037. At that point, the program’s trust funds will be depleted and payroll taxes will cover about three-fourths of payments owed. Previous reports, starting with last year, estimated the year of trust fund exhaustion to be 2037, 2041, 2041, 2040, 2041, 2042, 2042, 2041, 2038, 2037, 2034, 2032, and 2029. So 13 years ago, back in 1997, the forecast for Social Security was somewhat more pessimistic than it is now, even in the aftermath of the Great Recession.

Over the 75-year time horizon that the Trustees are obligated to consider, the estimated shortfall between dedicated revenues and promised benefits is now projected to be 1.92% of GDP. Previous reports, starting with last year, estimated that 75-year gap to be 2.00%, 1.70%, 1.95%, 2.02%, 1.92%, 1.89%, 1.92%, 1.87%, 1.86%, 1.89%, 2.07%, 2.19%, and 2.23%. Not much change there, either. Simply eliminating the cap on income subject to the Social Security payroll tax, currently $106,000, would eliminate the entire shortfall while affecting only the top 6 percent of workers. A combination of other modest changes would accomplish the same goal as well.

Once again, no news about Social Security is good news.