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.
To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
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.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)