- #CONGRESSIONAL BUDGET OFFICE SOCIAL SECURITY REPORT PDF#
- #CONGRESSIONAL BUDGET OFFICE SOCIAL SECURITY REPORT FULL#
Payroll Tax Increase Needed for 75-Year Solvencyħ5th-Year Spending (% of Taxable Payroll) Key Differences Between CBO and the Trustees MetricĪcross-the-Board Benefit Cut at Insolvencyħ5-Year Actuarial Shortfall (% of Taxable Payroll) 75 years from now, in 2097, CBO projects that Social Security spending will total 21.2 percent of taxable payroll (7.0 percent of GDP) while the Trustees estimate 17.8 percent (6.0 percent of GDP). 50 years from now, in 2073, CBO expects spending to total 20.3 percent of taxable payroll (6.7 percent of GDP), compared to the Trustees' projection of 18.4 percent (6.3 percent of GDP). In 2033, CBO expects spending to total 17.1 percent of taxable payroll (6.1 percent of GDP) while the Trustees expect it to total 16.3 percent (5.9 percent of GDP). For example, CBO expects spending to total 14.7 percent of taxable payroll this year while the Trustees expect spending to total 14.5 percent, with the disconnect between CBO's and the Trustees' spending projections growing over time. While both CBO and the Trustees project Social Security revenue to remain between 13 and 14 percent of taxable payroll over the next 75 years, CBO's projections of Social Security spending are much higher. The difference between CBO's and the Trustees' estimates is driven by differences in underlying assumptions, including assumptions about interest rates, economic growth, disability incidence, and population growth. In addition, CBO's 75-year imbalance of 5.1 percent of taxable payroll is nearly 1.5 times larger than the Trustees' 3.6 percent of payroll estimate. And while CBO expects the theoretically combined trust funds to deplete their reserves by 2033, the Trustees expect them to run out a year later, in 2034. While CBO projects OASI insolvency in 2032 and SSDI depletion in 2052, the Trustees expect the OASI trust fund to run out by 2033 and the SSDI trust fund to remain solvent over the next 75 years. This means a plan to restore sustainable solvency over the next 75 years would require the equivalent of increasing the 12.4 percent payroll tax rate by 41 percent (5.1 percentage points) or cutting benefits by 27 percent for all beneficiaries.ĬBO projects earlier insolvency dates and a larger 75-year actuarial shortfall than the Social Security Trustees estimated in their 2023 report. Over 75 years, CBO estimates that Social Security faces an actuarial shortfall of 5.1 percent of taxable payroll, or 1.7 percent of GDP.
Sources: Congressional Budget Office and Committee for a Responsible Federal Budget. Theoretically Combined Social Security Trust Funds Social Security Disability Insurance Trust Fund Social Security Old-Age and Survivors Insurance Trust Fund Key Numbers in CBO's Long-Term Social Security Projections Trust Fund
#CONGRESSIONAL BUDGET OFFICE SOCIAL SECURITY REPORT FULL#
Over the long term, CBO projects Social Security's cash shortfall (assuming full benefits are paid) will grow to 3.9 percent of taxable payroll (1.4 percent of GDP) by 2033, to 5.1 percent of payroll (1.7 percent of GDP) by 2050, to 6.8 percent of payroll (2.3 percent of GDP) by 2075, and to 7.4 percent of payroll (2.4 percent of GDP) by 2097. Over the subsequent decade, Social Security will run $3.5 trillion (2.9 percent of taxable payroll or 1.0 percent of GDP) of cumulative cash flow deficits. It will run a cash flow deficit of $154 billion in 2023, which is 1.6 percent of taxable payroll or 0.6 percent of Gross Domestic Product (GDP). The analysis below updates our previous analysis of CBO's last set of long-term Social Security projections, which were released in December 2022.ĬBO projects that Social Security will run chronic deficits over both the short- and long-term.
Upon insolvency, all beneficiaries regardless of age, income, or need will see their benefits cut by 25 percent across-the-board. On a theoretically combined basis, assuming revenue is reallocated in the years between OASI and SSDI insolvency, the Social Security trust funds will be insolvent by FY 2033, when today's 57-year-olds reach the normal retirement age and today's youngest retirees turn 72. Under CBO's projections, the Social Security Old-Age and Survivors Insurance (OASI) trust fund will exhaust its reserves by Fiscal Year (FY) 2032 and the Social Security Disability Insurance (SSDI) trust fund will become insolvent by calendar year 2052 (the Social Security Trustees project OASI insolvency by 2033 and the SSDI trust fund to remain solvent over the next 75 years). The checker found no problems in this document.The Congressional Budget Office (CBO) recently published detailed long-term projections for Social Security that project the financial outlook for the program over the next 75 years.
#CONGRESSIONAL BUDGET OFFICE SOCIAL SECURITY REPORT PDF#
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