Social Security has transitioned from annual surpluses to
May 16, 2012
SOURCE: Data from the Social Security Administration, The 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. Compiled by PGPF.NOTE: Data exclude interest income. The cumulative deficit before insolvency is equal to the current value of the OASI Trust Fund.
According to the latest government estimates, Social Security has begun a period of permanent cash-flow deficits, paying out more in annual benefits than revenue it brings in from taxes on payroll and benefits. Absent significant reform, Social Security will run out of authority to pay full scheduled benefits after 2036. At that time, projections by the Social Security actuary indicate that benefits will have to be cut by about 23 percent if laws are not changed. Such large cuts could be reduced if policymakers took action in advance by phasing in modest tax increases, benefit cuts, or both.
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