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June 22 — The Social Security trust funds will exhaust their assets in 2034, the same projection as last year, the Social Security Board of Trustees said in its 2016 annual report.
After 2034, the Social Security trust funds would be able to cover only about 79 percent of benefits, Carolyn W. Colvin, acting commissioner of the Social Security Administration, said during a June 22 news briefing on the report's findings. “Lawmakers have many policy options to remedy this shortfall,” Colvin said, urging Congress to act sooner rather than later.
The projected actuarial deficit over the next 75 years is 2.66 percent of taxable payroll, which is down from last year's deficit of 2.68, said the report, issued June 22. The projections are for the Old-Age and Survivors Insurance and the Disability Insurance trust funds combined.
The Disability Insurance trust fund was previously projected to go insolvent in 2016, but that was put off by the Bipartisan Budget Act of 2015, which addressed the fund's problems, Treasury Secretary Jacob J. Lew said. The DI fund's projected insolvency is now the third quarter of 2023, according to the report.
Social Security is in “good shape” in the near-term, but congressional action will be needed to ensure that the program doesn't deplete its reserves, Stephen C. Goss, the chief actuary at Social Security Administration, said during a June 22 Ways and Means Social Security Subcommittee hearing on the report's findings.
The small decrease in the actuarial deficit in this year's report to 2.66 is a small bit of good news because it was expected there would be a slight increase to 2.74, Goss said.
“The changes are not dramatic, the improvement is not dramatic, but itânullnulls always good to have some improvement,” he said.
The total costs of the combined Old-Age and Survivors Insurance and the Disability Insurance trust funds are projected to exceed its total income in 2020. Then, the number of assets in the trust fund will start to decline, reaching reserve depletion in 2034, he said.
“Should we reach a point of reserve depletion without congressional action, we simply will not be able to pay the full scheduled benefits on a timely basis. We've never reached that point before and we have absolute confidence that you all will not allow that to happen,” Goss said.
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The full report is at https://www.ssa.gov/oact/tr/2016/tr2016.pdf.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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