Social Security Board of Trustees: No Change in Projected Year of Trust Fund Reserve Depletion

By on May 31, 2013 in News

The Social Security Board of Trustees has released its annual report on the long-term financial status of the Social Security Trust Funds.

The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to be depleted in 2033, unchanged from last year, with 77 percent of benefits still payable at that time.  The DI Trust Fund will become depleted in 2016, also unchanged from last year’s estimate, with 80 percent of benefits still payable.

In the 2013 Annual Report to Congress, the Trustees announced:

  • The combined trust fund reserves are still growing and will continue to do so through 2020.  Beginning with 2021, the cost of the program is projected to exceed income.
  • The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2033 – the same as projected last year.  At that time, there will be sufficient income coming in to pay 77 percent of scheduled benefits.
  • The projected actuarial deficit over the 75-year long-range period is 2.72 percent of taxable payroll — 0.05 percentage point larger than in last year’s report.

“The Social Security Trust Funds’ projected depletion dates have not changed, and three-fourths of benefits would still be payable after depletion.  But the fact remains that Congress needs to act to ensure the long-term solvency of this vital program,” said Carolyn W. Colvin, Acting Commissioner of Social Security.  “The projected year for Disability Insurance Trust Fund depletion remains 2016, and legislative action is needed as soon as possible to address this financial imbalance.”

Other highlights of the Trustees Report include:

  • Income including interest to the combined OASDI Trust Funds amounted to $840 billion in 2012.  ($590 billion in net contributions, $27 billion from taxation of benefits, $109 billion in interest, and $114 billion in reimbursements from the General Fund of the Treasury—almost exclusively resulting from the 2012 payroll tax legislation)
  • Total expenditures from the combined OASDI Trust Funds amounted to $786 billion in 2012.
  • 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 asset reserves of the combined OASDI Trust Funds increased by $54 billion in 2012 to a total of $2.73 trillion.
  • During 2012, an estimated 161 million people had earnings covered by Social Security and paid payroll taxes.
  • Social Security paid benefits of $775 billion in calendar year 2012.  There were about 57 million beneficiaries at the end of the calendar year.
  • The cost of $6.3 billion to administer the program in 2012 was a very low 0.8 percent of total expenditures.
  • The combined Trust Fund asset reserves earned interest at an effective annual rate of 4.1 percent in 2012.

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  1. wombat1951 says:

    For the umpteenth time 🙂 …. There are no spendable assets in any of the “trust funds”. None. Zero. Nada. Zilch.
    :
    The “trust funds” contain nothing but debt. Officially called “inter-governmental debt” — and all of the various “trust funds” combined add up to about one third of the $17T “Natinal Debt”.
    :
    Articles like this one do a huge diservice to the goal of fixing SS and Medicare, because they impart of completely false picture of the “trust funds” being useful for anything — when they are NOT!
    :
    The “trust funds” could disappear tomorrow and the ability of the government to pay SS or Medicare benefits would not be affected one little bit. Treasury would still have to borrow or tax to obtain the actual money needed to pay benefits that exceed current year revenues from SS or Medicare taxes. The SS Trustees even admitted this in their 2009 Annual Report:
    :
    The 2009 quote, spotted by Allen Smith, economics professor emeritus at Eastern Illinois University, and author of “The Big Lie: How Our Government Hoodwinked the Public, Emptied the S.S. Trust Fund, and caused The Great Economic Collapse”, is telling. It says that, “Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.”
    :
    In other words, the trust fund is of no economic value. And the continuing lies told by Congress and authors like this article that pretend that these “trust funds” have any value only hamper the ability to fully understand the deep problem these programs are in, and any discussion to come up with a plan to save them.

    • grannybunny says:

      Actually, it’s intragovernmental debt.

      • wombat1951 says:

        Of course 🙂 Sadly though, you don’t seem to understand what it is…..as you continue to opine that what is in the “trust fund” somehow helps the solvency of Social Security. Which, of course, it doesn’t.

        • grannybunny says:

          As the article points out, it helps the solvency of Social Security, but not the Treasury.

          • wombat1951 says:

            grann;ybunny…..it does not. Social Security is no more solvent with the Trust Fund IOUs than without them. In both cases — with or without the Trust Fund IOUs — Treasury still has to find the money from the same sources — more taxes or more borrowing — to cover any benefits not funded by current SS revenues. The existance of the Trust Fund is immaterial to the ability of Treasury to pay the benefits not funded by current available SS tax revenues.

          • grannybunny says:

            For the last time: Treasury has no legal obligation “to find the money…to cover any benefits not funded by current SS revenues.” It does, however, have a legal obligation to transfer funds into the Trust Fund as the special obligation bonds are redeemed.

          • wombat1951 says:

            For the last time — read the source article I referenced in another comment about the true history and nature of the SS “trust fund” and why it’s a scam. And why it does NOT contain assets that can be used. And why when SS revenues are insufficient to pay current benefits, Treasury has EXACTLY the same options available to it to come up with the money that it would have to use whether or not the Trust Fund even existed.

          • grannybunny says:

            As already stated, the difference is whether or not the Treasury is obligated to pay, not how it will do so.

          • wombat1951 says:

            grannybunny — the whole issue of this thread is about HOW Treasury will pay. My point has consistently been that Treasury’s ABILITY to pay is 100% unaffected by the existance of the SS “trust fund” because the “trust fund” contains no assets that can be spent or sold to anyone to raise the money.
            :
            Furthermore, as the 1960 Supreme Court decsion actually stated, there is NO obligation on the part of the Federal government to pay SS benefits. The existance of the “trust fund” did not matter to their finding in that case. You were asked to come up with a source that disputes this, and all you could do was quote the article above which gets it wrong just like you do.

          • grannybunny says:

            As the great Samuel Johnson once said, “I have given you an argument; I cannot give you an understanding.” You are correct that the existence of the Trust Fund has no affect on the Treasury’s ability to pay Social Security benefits. You are incorrect in your claim that the Trust Fund “contains no assets…to raise the money,” since the special obligation bonds are assets that are currently being redeemed to raise the money to pay benefits. It’s the Treasury’s problem — not the Trust Fund’s — as to where Treasury obtains the money to redeem the bonds. But, this is the United States of America — God Bless! — and you are free to hold, and express, any opinion you like. God bless you, too! 🙂

          • wombat1951 says:

            Speaking of not understanding 🙂 If, as you now [finally] concede, the Trust Fund has no effect on the Treasury’s ability to pay benefits, then how, pray tell, can they be “assets that are currently being redeemed to raise the money to pay benefits” ??
            :
            Simply an amazing illogical bit of reasoning!!
            :
            My argument has never been anything other than the simple observation that the SS “trust fund” is worthless to the ability of the Federal government to pay SS benefits that cannot be paid from current SS revenues. You and others have been very obstinate in your proposition that the “trust fund” has value to that activity, when it absolutely does not.
            :
            A final comment: you [as is the author of this article] is 100% mistaken that the existance of the “trust fund” legally obligates the Federal government to pay SS benefits as long as there are IOUs in it. The 1960 Supreme Court decision was explicit that this is not the case. Until and unless you or anyone else can show a legal opinion to the contrary, your belief that the “trust fund” at least forces this obligation of the Federal government is in error.
            :
            But as before, thanks for a civil discussion!

          • grannybunny says:

            You are misreading the Supreme Court decision. It said that an individual cannot legally enforce an alleged entitlement to benefits. But, the Trust Fund can certainly — legally — insist that its bonds be honored and redeemed, just like any other holder of Government bonds.

          • wombat1951 says:

            Since both the Trust Fund and Treasury are the Federal Government, you point, even if valid — which it is not — is completely irrelement to the question of the usefulness and utility of the Trust fund to the solvency and operation of Social Security.

          • grannybunny says:

            That’s not true; the debt to the trust fund is secured by the bonds, which guarantee Social Security’s solvency for the next 20 years.

          • wombat1951 says:

            Once again YOU are wrong, on two counts:
            :
            #1 — the existance of the Trust Fund poses NO legal obligation on the US government to pay SS benefits. The 1960 Nestor Supreme Court ruling settled the idea that there was any contractual obligation on part of the Federal government to pay benefits. As a result of the 1960 Supreme Court ruling, Congress and the President have the legal authority to amend any and all parts of the Social Security Act, as well as the authority to either increase or decrease Social Security benefits. They are under no obligation by the existance of the phony “trust fund” to repay all of the money that was diverted to ghe general fund.
            :
            #2 — the ability of the US Government to keep Social Security “solvent” is exactly the same whether or not the “trust fund” exists or not. This basic reality makes your point about the “trust fund” guarantee fiscally moot — since the ability of the Federal government to come up with the actual money to pay benefits is exactly the same whether or not the trust fund exists, and whether or not a future Court might rule that the trust fund must be “repaid”.
            :
            The fatal flaw in your argument is, and has always been, putting economic faith in the existance of the SS Trust Fund as something that provides any help to the ability of the Federal government to pay benefits.

          • grannybunny says:

            Your logic is faulty. You are correct that the government has no legal obligation to pay Social Security benefits. However, it is legally obligated to redeem its bonds, which the Trust Fund uses to pay the benefits.

          • wombat1951 says:

            grannybunny — how is Social Security’s solvency helped by this “obligation”, when to pay the benefits, the government would have to do the EXACT SAME THING to raise the money to pay them?
            :
            The existance of the “trust fund” provides ZERO additional solvency to Social Security because it is fiscally and economically immaterial when the bond holder and the bond redeemer are the same entity 🙂 It is no different than if you gave your husband a loan and then demanded he pay it back to you [sorry if I assume your marital status 🙂 ] You then tell him he has to repay you so you can pay the water bill today. For him to repay you, the money comes from the same combined pot! Your ability to pay that water bill was not assisted in any way by getting the money from your spouse, since the money came from the same pot in the first place! To quote the SS Trustees — it represented “no new income” to your pot!

          • grannybunny says:

            If you believe that the Social Security Trust Fund and the U. S. Treasury are the same entity, I cannot help you. If they were the same entity, there would be no need for bonds to be issued when Trust Fund money is loaned to the Treasury.

          • wombat1951 says:

            If you believe that either the US Treasury or the Social Security Trust Fund are not both part of the same Federal Government, then indeed there is no help for you in your delusions about the reality of the whole Social Security fiscal mess 🙂
            :
            Why is it so difficult for you to understand that “intra-governmental debt” is between two entities of the same Federal government? It is essentially no different that when you “borrow” money from you husband’s wallet! It came from, and is returned to, the same place!

  2. jhenjoh says:

    What trust fund reserve? It’s been borrowed away to pay current expenses. The trust fund is fully of only unredeemable IOUs.

    • grannybunny says:

      Except for the fact that the IOUs are — in fact — redeemable, and are currently being redeemed, at interest.

  3. Steve Neal says:

    So, all us 50-year old workers, who have given thousands every year of our working lives ($495 from my last paycheck) can expect to do without OASDI returns on our life-long investment (notice I did not say “benefits”, because I was forced to pay this program my whole life, and damn sure expect it to be there for me until I die)?
    —————————————-Well, that just sucks! ————————————————————————-Perhaps we’ll have to replace those in gov’t who seem to think this is OK. Before I waste an afternoon collecting the congressional voting data on ever-expanding budgets, huge deficits, raised debt-ceilings, and hiring / training even more gov’t workers to support ObamaCare, I have a fairly good idea it is the DUMMIECRATS who are assisting ObaMao in wrecking social security, medicare, and chopping away at my retired military benefits and federal pay. Perhaps I’m not the only one who can see this happening…
    Never forget to vote and this time let’s send a real message to those who work for us in Washington D.C.

    • TheRealOldFed says:

      You are wrong. It is the Republicans who think Social Security is an “entitlement.” They also think the military retirement is “far too generous” and want to cut it. And they hate us Federal employees. 3 years of a pay freeze, hiring freeze so we can’t even replace those who left, and constant bashing. Republicans want to get rid of Federal employees and make them contractor jobs so they can reward the big contracting companies for donating to their election campaigns. Any Federal employee who votes Republican is voting to cut their own pay and benefits, now and in retirement.

      • demhack says:

        Sorry its dems and Barak that think military retirement is a gift not even an entitlement and VA disability needs to be eliminated

        • Tonya99 says:

          Wrong… yet again. I hear Cantor, Ryan, Coburn, Issa & Rubio (who are all Repuglicans) yapping about how entitlements (Social Security, Medicare, etc.) need to be curbed. Give me the name of a Democrat who has advocated doing away with these programs.

          • Rambo1957 says:

            Give me a name of a Democrat that doing away with ANY entitlement program. You, as a taxpayer, are seen as an ATM and vehicle to stay in power by the Democrats. Nothing more, nothing less. Oh, and the Republicans aren’t much better (if at all).

          • demhack says:

            Barak for 1 has set his sites on military pay and retirement as well as HC

      • jhenjoh says:

        FYI, those getting Social Security who have later actions taken, have them processed by the Post Entitlement system. That is what it is called. And always has been. So don’t get your shorts in a knot over who believes it is an entitlement. That is what it is called by the agency itself.

      • OldRet says:

        Elections have consequences and the Democrats are in charge so don’t try to blame it ALL on the Republicans!

    • demhack says:

      SS could be solvent if they increased contributions to 10% rather than the current 6%

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