Social Security On Track to Go Broke, Says CBO
It's no surprise, given the long years of discussion we've had over the financial illogic of the United States' entitlement programs, but Social Security is on track to pay out a lot less than people expect as its costs soar. The latest analysis comes from the Congressional Budget Office (CBO), which points out that Social Security outlays started to exceed tax revenues for the program in 2010. "As more members of the baby-boom generation retire, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the gap will grow larger in the 2020s…"
The so called "trust fund" (really, just a federal line item) will let the federal government keep its promises in terms of both Disability Insurance (DI) and Old-Age and Survivors Insurance (OASI) for a while, but the day of reckoning is getting awfully close, in terms of entitlements just crowding everything else out of the budget.
CBO projects that under current law, the DI trust fund will be exhausted in fiscal year 2017, and the OASI trust fund will be exhausted in 2032. If a trust fund's balance fell to zero and current revenues were insufficient to cover the benefits specified in law, the Social Security Administration would no longer have legal authority to pay full benefits when they were due. In 1994, legislation redirected revenues from the OASI trust fund to prevent the imminent exhaustion of the DI trust fund. In part because of that experience, it is a common analytical convention to consider the DI and OASI trust funds as combined. Thus, CBO projects, if some future legislation shifted resources from the OASI trust fund to the DI trust fund, the combined OASDI trust funds would be exhausted in 2030.
Which is to say, the system is still consuming an ever greater take of the federal budget, and costing far more than we can afford.