No
change in solvency of Social Security - broke by 2042
March 23, 2004 - The
2004 Social Security Trustees Report released today shows little change in
the projected financial status of the Social Security program over last
year. And again this year, the Social Security Board of Trustees states
that, absent changes, Social Security’s currently scheduled benefits are
not sustainable over the long term and the Trust Fund will be broke in
2042.
In the 2004 Annual
Report to Congress, the Trustees announced:
The projected
point at which tax revenues will fall below program costs comes in
2018 -- the same as the estimate in last year’s report.
The projected
point at which the Trust Funds will be exhausted comes in 2042 -- also
the same as the estimate in last year’s report.
The projected
actuarial deficit over the 75-year long-range period is 1.89 percent
of taxable payroll.
Over the 75-year
period, the Trust Funds require additional revenue equivalent to $3.7
trillion in today’s dollars to pay all scheduled benefits. This
unfunded obligation grew $200 billion from last year.
“I want to assure
those already receiving Social Security benefits – as well as those who
are close to retirement – that your benefits are secure,” said Jo Anne
Barnhart, Commissioner of Social Security. “Reaching agreement on an
appropriate solution to Social Security’s long-term financing challenges
will require Congress and the President working together in a bipartisan
manner.”
Other highlights of
the Trustees Report include:
Income to the
combined Old-Age and Survivors, and Disability Insurance (OASDI) Trust
Funds amounted to $632 billion in 2003.
During the year,
an estimated 154 million people had earnings covered by Social
Security and paid payroll taxes.
The Trust Funds
paid benefits of more than $470 billion in calendar year 2003. There
were 47 million beneficiaries at the end of the calendar year.
The cost of $4.6
billion to administer the program continues to be a very low 0.7
percent of total income.
Total expenditures
from the combined OASDI Trust Funds amounted to $479 billion in 2003.
The assets of the
combined OASDI Trust Funds increased by $153 billion in 2003 to a
total of $1.5 trillion.
Interest earned on
the invested assets of the combined Trust Funds was $85 billion in
2003. The combined Trust Fund assets earned interest at an effective
annual rate of 6.0 percent.
The Board of Trustees
is comprised of six members. Four serve by virtue of their positions with
the federal government: John W. Snow, Secretary of the Treasury and
Managing Trustee; Jo Anne Barnhart, Commissioner of Social Security; Tommy
G. Thompson, Secretary of Health and Human Services; and Elaine L. Chao,
Secretary of Labor. The other two members, appointed by the President and
confirmed by the Senate, are John L. Palmer and Thomas R. Saving.
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