WASHINGTON – The Social Security board of trustees report the Social Security program continues to be substantially underfinanced for the long term.
In the 2002 annual report to Congress, the trustees announced the projected point at which tax revenues will fall below program costs comes in 2017 – one year later than the estimate in last year’s report.
The projected point at which program costs exceed tax revenues plus interest from the trust funds comes in 2027 – two years later than the estimate in last year’s report
The report indicates the projected point at which the trust funds will be exhausted comes in 2041 – three years later than the estimate in last year’s report.
Need better plan. “These projections suggest that we have not lost ground in the past year,” said Jo Anne Barnhart, commissioner of Social Security. “However, the report still projects that, once the trust funds are exhausted, payroll tax revenues will be sufficient to meet only 73 percent of Social Security benefit obligations under current law.
“Projections for the late 21st century paint an even bleaker picture.
Barnhart suggests long-term trust fund deficits should be addressed to allow a gradual phasing in of any necessary changes.
“Social Security will continue to play its essential role for today’s retirees and other beneficiaries, workers, their children and grandchildren,” Barnhart said. “But, as the report issued today makes clear, we cannot postpone our task.”
Other findings. Other highlights of the trustees’ report include:
* The Old-Age and Survivors, and Disability Insurance Trust Funds paid benefits of approximately $432 billion in calendar year 2001;
* There were 46 million beneficiaries on the rolls at the end of 2001;
* Income to the combined trust funds amounted to $602 billion in 2001 and expenditures were $439 billion, increasing the assets of the combined funds by $163 billion to $1.21 trillion at the end of 2001;
* The cost of $3.7 billion to administer the program is 0.6 percent of total income;
* Interest earned on the invested assets of the combined trust funds was $72.9 billion in 2001.
The longer-term deterioration in outlook resulted from the passage of another year, a lower death rate assumption and projected higher benefits on average. The combination means that at the end of the 75-year period the program is in a significantly worse position than projected in last year’s report.
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