Following the release of the 2015 Social Security Trustees' report yesterday, CRFB has released a report summarizing the myriad statistics and projections that the Trustees published. Our report discusses the solvency of both the disability and old-age portions of the program, the long-term shortfall of the program, and how the projections changed since last year.
The report shows a similar, though slightly improved, outlook to last year for the program. The Social Security Disability Insurance (SSDI) trust fund is still projected to be exhausted in late 2016, leading to a 19 percent cut in benefits. The insolvency dates for the old-age and combined trust funds have been pushed back one year to 2035 and 2034, respectively, at which point benefits would be cut by 21 percent for all beneficiaries. The program faces a 2.68 percent of payroll shortfall, or 0.96 percent of Gross Domestic Product (GDP), that lawmakers must close to ensure solvency over the next 75 years.
Click here to read the full paper.
As our report explains, these financial issues are the result of an already-existing and widening gap between spending and revenue.
As the number of beneficiaries in the program continues to grow, outlays have already increased from 10.4 percent of payroll (4.0 percent of GDP) in 2000 to 14.1 percent of payroll (5.0 percent of GDP) today. The Trustees project they will continue to grow to 16.7 percent of payroll (6.0 percent of GDP) by 2040, dip slightly, and then grow to 18.0 percent of payroll (6.2 percent of GDP) by 2090.
Meanwhile, revenues will fail to keep up – growing slightly as a percent of payroll from 12.8 percent today to 13.3 percent in 2090, while actually falling slightly as a percent of GDP after the 2020s from 4.8 percent in 2030 to 4.6 percent by 2090.