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Tuesday, February 01, 2005
Crisis!
From the Congressional Budget Office:
CBO projects that under current law Social Security outlays will first exceed revenues from payroll taxes and taxation of benefits in 2020 and that the program will exhaust the trust funds in 2052. After the trust funds are exhausted, Social Security spending cannot exceed annual revenues. As a consequence, because dedicated revenues are projected to equal 78 percent of scheduled outlays in 2053, CBO finds that the benefits paid will be 22 percent lower than the scheduled benefits.
The CBO moved the date outlays exceed revenues back 2 years, but left the trust fund exhaustion date the same. What should you expect in benefits?
| Decade of birth | Promised annual benefits | Projected annual benefits |
| 1970 | $17,200 | $17,200 |
| 1980 | $19,500 | $18,800 |
| 1990 | $22,100 | $16,900 |
| 2000 | $25,000 | $18,500 |
There's a modest shortfall sometime in the 2040s, easily correctable with modest economic growth or by raising the ceiling on FICA taxes.
