|Targeted News Service|
In fiscal year 2013,
Revenues from taxes, along with intra-governmental interest payments, are credited to
In calendar year 2010, for the first time since the enactment of the Social Security Amendments of 1983, annual outlays for the program exceeded annual tax revenues (that is, outlays exceeded total revenues excluding interest credited to the trust funds). In 2012, outlays exceeded noninterest income by about 7 percent, and CBO projects that the gap will average about 12 percent of tax revenues over the next decade. As more members of the baby-boom generation retire, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the gap will grow larger in the 2020s and will exceed 30 percent of revenues by 2030.
CBO projects that under current law, the DI trust fund will be exhausted in fiscal year 2017, and the OASI trust fund will be exhausted in 2033. If a trust fund's balance fell to zero and current revenues were insufficient to cover the benefits specified in law, the
The amount of
Scheduled and Payable Benefits
CBO prepares two types of benefit projections. Benefits as calculated under the Social Security Act, regardless of the balances in the trust funds, are called scheduled benefits. However, if the trust funds were depleted, the
To quantify the uncertainty in its
Long-term projections are necessarily uncertain, and that uncertainty is illustrated in this publication; nevertheless, under a variety of values for key factors, the general conclusions of this analysis are unchanged. In contrast to previous reports, the uncertainty analysis in this year's report focuses on the next 25 years. Beyond that period, the projected ratio of debt held by the public to gross domestic product (GDP) is well outside historical experience in a significant share of simulations. Projections of economic outcomes under those circumstances are unreliable, precluding analysis of the uncertainty of those outcomes. Changes in CBO's Long-Term Social Security Projections Since 2012
The shortfalls for
Spending and Revenues Measured Relative to Taxable Payroll
The 75-year imbalance has increased from 1.95 percent to 3.36 percent of taxable payroll. The higher projection results from a number of factors, including increases in projections of life expectancy and of the disability incidence rate, both of which raise projected outlays for benefits, and decreases in the projection of income taxes on benefits. This year, rather than using the
When measured as a share of taxable payroll, long-term tax revenues are lower than those that CBO projected in 2012, but long-term outlays are higher. Compared with last year's projection, the 75-year income rate–a measure of
When measured as a share of GDP, the projection of the income rate is slightly lower than it was in last year's report. CBO reduced its projection of how much a new excise tax on some employment-based health insurance plans with premiums above a certain threshold will affect the mix of compensation that employees receive, resulting in a lower projection of taxable earnings. That reduction in taxable earnings was partly offset by a lower projection of growth in health care costs, which implies that a larger share of compensation will be paid as taxable earnings, rather than nontaxable health benefits. As a result of those partially offsetting changes, CBO projects that taxable earnings will make up a smaller share of compensation than the amount estimated last year. Together with the reductions in income tax rates, those changes imply that the income rate will be slightly lower than the level estimated last year.
The current projection of
The 75-year imbalance is greater as a share of GDP for the same reasons that it is greater as a share of taxable payroll. The imbalance rose from 0.73 percent of GDP to 1.17 percent.
Graph omitted. Click here to view: http://www.cbo.gov/publication/44972
TNS 30FurigayJane-131217-4582473 30FurigayJane
|Copyright:||(c) 2013 Targeted News Service|