Social Security: The Trust Fund
Dawn Nuschler
Specialist in Income Security
Gary Sidor
Information Research Specialist
August 20, 2010
Congressional Research Service
7-5700
www.crs.govMay 25, 2011
The House Ways and Means Committee is making available this version of this Congressional Research Service
(CRS) report, with the cover date shown above, for inclusion in its 2011 Green Book website. CRS works
exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of
both the House and Senate, regardless of party affiliation.
Congressional Research Service
RL33028
CRS Report for Congress
Prepared for Members and Committees of Congress
Social Security: The Trust Fund
Summary
The Social Security program pays benefits to retired and disabled workers and their family
members, and to family members of deceased workers. Program income and outgo are accounted
for in two separate trust funds authorized under Title II of the Social Security Act: the Federal
Old-Age and Survivors Insurance (OASI) trust fund and the Federal Disability Insurance (DI)
trust fund. This report refers to the two trust funds as an aggregate Social Security trust fund and
discusses the operations of the OASI and DI trust funds on a combined basis.
Social Security is financed by payroll taxes paid by covered workers and their employers, federal
income taxes paid by some beneficiaries on a portion of their benefits, and interest income from
the Social Security trust fund investments. Social Security tax revenues are invested in federal
government securities (special issues) held by the trust fund, and these federal government
securities earn interest. The revenues exchanged for the federal government securities are
deposited into the general fund of the U.S. Treasury and are indistinguishable from revenues in
the general fund that come from other sources. Because the assets held by the trust fund are
federal government securities, the trust fund balance represents the amount of money owed to the
Social Security trust fund by the general fund of the U.S. Treasury. Funds needed to pay Social
Security benefits and administrative expenses come from the redemption or sale of federal
government securities held by the trust fund.
The Social Security trust fund represents funds dedicated to pay current and future Social
Security benefits. However, it is useful to view the trust fund in two ways: (1) as an internal
federal accounting concept, and (2) as the accumulated holdings of the Social Security program.
For internal accounting purposes, certain accounts within the U.S. Treasury are designated by law
as trust funds to track revenues (and expenditures) dedicated for specific purposes. There are a
number of trust funds in the U.S. Treasury, including those for Social Security, Medicare,
unemployment compensation, and federal employee retirement.
By law, Social Security tax revenues must be invested in U.S. government obligations (debt
instruments of the U.S. government). The accumulated holdings of U.S. government obligations
are often viewed as being similar to assets held by any other trust on behalf of the beneficiaries.
However, the holdings of the Social Security trust fund differ from those of private trusts because
(1) the types of investments the trust fund may hold are limited and (2) the U.S. government is
both the buyer and seller of the investments.
This report covers the basics of how the Social Security program is financed and how the Social
Security trust fund works. It will be updated annually to reflect current projections of the financial
status of the Social Security trust fund.
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Social Security: The Trust Fund
Contents
Introduction ................................................................................................................................1
How the Social Security Program Is Financed .............................................................................1
Temporary Payroll Tax Reduction for Workers in 2011..........................................................2
The Social Security Trust Fund as a Designated Account.............................................................23
Social Security Trust Fund Revenues ....................................................................................23
Social Security Trust Fund Costs...........................................................................................3
Social Security Trust Fund Operations...................................................................................3
Investment of the Social Security Trust Fund.........................................................................89
The Social Security Trust Fund and the Federal Budget .........................................................9 10
On-Budget Versus Off-Budget...............................................................................................9 10
The Social Security Trust Fund as Accumulated Holdings ......................................................... 1011
The Social Security Trust Fund and the Level of Federal Debt............................................. 14
The Social Security Trust Fund and Federal Default ............................................................ 15
The Social Security Trust Fund and Benefit Payments ......................................................... 1516
Figures
Figure 1. Ratio of Current (Annual) Revenues to Costs for the Social Security Trust Fund,
1957-20362035................................................................................................................................89
Tables
Table 1. Annual Revenues, Costs, and Cash Flow Surplus or DeficitSurpluses or Deficits for the Social
Security Trust Fund, 1957-1983 ...............................................................................................45
Table 2. Annual Revenues, Costs, and Cash Flow SurplusSurpluses or Deficits for the Social
Security Trust
Fund, 1984-2009.2010 .....................................................................................................................56
Table 3. Projected Annual Revenues, Costs, and Cash Flow Surplus or DeficitDeficits for the
Social Social
Security Trust Fund, 2010-20362011-2035 ............................................................................................6...7
Table 4. Accumulated Holdings of the Social Security Trust Fund, 1957-20092010........................... 1213
Table 5. Projected Accumulated Holdings of the Social Security Trust Fund, 2010-2036 ........... 13
Contacts
Author Contact Information ...................................................................................................... 16
2011-2035............ 14
Acknowledgments .................................................................................................................... 16
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Social Security: The Trust Fund
Introduction
The Social Security program pays benefits to retired and disabled workers and their family
members, and to the family members of deceased workers. As of December 2009April 2011, there were 52.554.6
million Social Security beneficiaries. Sixty-four percent of those beneficiaries were retired
workers and 15% were disabled workers. The remaining 21% were survivors or the spouses and
children of retired or disabled workers.1
Social Security is financed by payroll taxes paid by covered workers and their employers, federal
income taxes paid by some beneficiaries on a portion of their benefits, and interest income from
the Social Security trust fund investments. Social Security tax revenues are invested in federal
government securities (special issues) held by the trust fund, and these federal government
securities earn interest. The revenues exchanged for the federal government securities are
deposited into the general fund of the U.S. Treasury and are indistinguishable from revenues in
the general fund that come from other sources. Because the assets held by the trust fund are
federal government securities, the trust fund balance represents the amount of money owed to the
Social Security trust fund by the general fund of the U.S. Treasury. Funds needed to pay Social
Security benefits and administrative expenses come from the redemption or sale of federal
government securities held by the trust fund.2
The Secretary of the Treasury (as the Managing Trustee of the Social Security trust fund) is
required by law to invest Social Security revenues in securities backed by the U.S. government. 3
The purchase of government securities allows any surplus Social Security revenues to be used for
other (non-Social Security) government spending needs at the time.4
The Social Security trust fund is both a designated account within the U.S. Treasury and the
accumulated holdings of special U.S. government obligations. Both represent the funds
designated to pay current and future Social Security benefits.
How the Social Security Program Is Financed
The Social Security program is financed primarily by revenues from Federal Insurance
Contributions Act (FICA) taxes and Self Employment Contributions Act (SECA) taxes. FICA
taxes are paid by both employers and employees, but it is employers who remit the taxes to the
U.S. Treasury. Employers remit FICA taxes on a regular basis throughout the year (for example,
weekly, monthly, quarterly or annually), depending on the employer’s level of total employment
taxes (including FICA and federal personal income tax withholding). The FICA tax rate of 7.65%
each for employers and employees has two components: 6.2% for Social Security and 1.45% for
Medicare Hospital Insurance. In 2010, employers and employees each pay 6.2% of wages up to
$106,800 in Social Security payroll taxes. The SECA tax rate is 15.3% for self-employed
individuals, with
12.4% for Social Security and 2.9% for Medicare Hospital Insurance. In 2010,
1
Social Security Administration (SSA), Fast Facts & Figures About Social Security, 2010, SSA Publication No. 1311785, August 2010, p. 14, http://www.socialsecurity.gov/policy/docs/chartbooks/fast_facts/2010/fast_facts10.pdfThe respective Social
Security contribution rates are levied on covered wages/net self-employment income up to
1
Social Security Administration (SSA), Monthly Statistical Snapshot, April 2011, May 2011, Table 2,
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/index.html.
2
Social Security Administration, Trust Fund FAQs, http://www.socialsecurity.gov/OACT/ProgData/fundFAQ.html.
3
Social Security Act, Title II, §201(d).
4
This is often referred to as “borrowing from the Social Security trust fund.”
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self-employed individuals pay 12.4% of net self-employment income up to $106,800 in Social
Security payroll taxes, with$106,800 in 2011.5 Self-employed individuals may deduct one-half of the SECA taxes allowed as a deduction for federal income
income tax purposes.56 SECA taxes are normally paid once a year as part of filing an annual individual
individual income tax return.6
In addition to Social Security payroll taxes, the Social Security program has two other sources of
income. Certain Social Security beneficiaries must include a portion of Social Security benefits in
taxable income for the federal income tax, and the Social Security program receives part of those
taxes.7 In addition, the Social Security program receives interest from the U.S. Treasury on its
investments in special U.S. government obligations.
The Internal Revenue Service (IRS) processes the tax returns and tax payments for federal
employment taxes and federal individual income taxes. All of the tax payments are deposited in
the U.S. Treasury along with all other receipts from the public for the federal government.
The Social Security Trust Fund as a Designated
Account
Within the U.S. Treasury, there are numerous accounts established for internal accounting
purposes. Although all of the monies within the Treasury are federal monies, the designation of an
account as a trust fund allows the government to track revenues (and expenditures) dedicated for
specific purposes. In addition, the government can affect the level of revenues and expenditures
associated with a trust fund through changes in the law. Social Security program income and
outgo are accounted for in two separate trust funds authorized under Title II of the Social Security
Act: the Federal Old-Age and Survivors Insurance (OASI) trust fund and (2) the Federal
Disability Insurance (DI) trust fund.8 This report refers to the two separate trust funds as an
aggregate Social Security trust fund and discusses the operations of the OASI and DI trust funds
on a combined basis.
Social Security Trust Fund Revenues
The Social Security trust fund receives a credit equal to the Social Security payroll taxes
deposited in the U.S. Treasury by the IRS.9 The payroll taxes are allocated between the OASI and
5
Self-employed individuals are required to pay Social Security payroll taxes if they have annual net earnings of $400
or more. Only 92.35% of net self-employment income (up to the annual limit) is taxable.
6
The limit on wages and net self-employment income subject to the Social Security payroll tax is adjusted annually
based on average wage growth, if a Social Security cost-of-living adjustment (COLA) is payable. Because no COLA
was payable in 2010, there was no increase in the limit on wages and net self-employment income subject to the Social
Security payroll tax from 2009 to 2010. The Medicare Hospital Insurance component of the FICA and SECA tax is
levied on total wages. For more information on the Social Security COLA, see CRS Report 94-803, Social Security:
Cost-of-Living Adjustments, by Gary Sidor.
Temporary Payroll Tax Reduction for Workers in 2011
As noted above, under current law, the Social Security payroll tax rate is 6.2% for employers and
employees (each) and 12.4% for the self-employed. On December 17, 2010, the President signed
into law H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation
Act of 2010 (P.L. 111-312). Title VI of the law provides a temporary reduction of 2 percentage
points in the payroll tax rate for employees and the self-employed in 2011. As a result, the Social
Security payroll tax rate is 4.2% for employees and 10.4% for the self-employed in 2011. The law
makes no change to the Social Security payroll tax rate for employers (6.2%) or to the amount of
wages and net self-employment income subject to the payroll tax ($106,800 in 2011).8
To protect the Social Security trust fund from a loss of revenues resulting from a temporary
reduction in the payroll tax rate for employees and the self-employed, the law appropriates to the
Social Security trust fund amounts equal to the reduction in revenues to the Treasury. The law
specifies that these appropriated amounts “shall be transferred from the general fund at such times
and in such manner as to replicate to the extent possible the transfers which would have occurred
to such Trust Fund had such amendments not been enacted.”9
5
The limit on wages and net self-employment income subject to the Social Security payroll tax (known as the taxable
wage base) is adjusted annually based on average wage growth, if a Social Security cost-of-living adjustment (COLA)
is payable. Because no COLA was payable in 2010 and 2011, the taxable wage base has remained at its 2009 level
($106,800) in 2010 and 2011. The Medicare Hospital Insurance component of the FICA and SECA tax is levied on
total wages. For more information on the Social Security COLA, see CRS Report 94-803, Social Security: Cost-ofLiving Adjustments, by Gary Sidor.
6
Self-employed individuals are required to pay Social Security payroll taxes if they have annual net earnings of $400
or more. Only 92.35% of net self-employment income (up to the annual limit) is taxable.
7
The taxes associated with including Social Security benefits in federal taxable income go to the Social Security trust
fund and the Medicare Hospital Insurance trust fund. See CRS Report RL32552, Social Security: Calculation and
History of Taxing Benefits, by Christine Scott and Janemarie Mulvey.
8
Social Security Act, Title II, §201.
9
A portion of the federal income taxes paid on Social Security benefits and the interest income on Social Security trust
fund investments are also credited to the Social Security trust fund.
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Social Security: The Trust Fund
DI trust funds based on a proportion specified by law. 10 Currently, of the 6.2% payroll tax rate,
5.3% is allocated to the OASI trust fund and 0.9% is allocated to the DI trust fund.11
Social Security Trust Fund Costs
The U. For more information, see CRS Report R41648, Social Security: Temporary Payroll Tax Reduction in 2011, by Dawn
Nuschler.
9
The text of P.L. 111-312 is available at http://www.gpo.gov/fdsys/pkg/PLAW-111publ312/pdf/PLAW111publ312.pdf. Title VI, Temporary Employee Payroll Tax Cut, is on pages 124 STAT. 3309-10.
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The Social Security Trust Fund as a Designated
Account
Within the U.S. Treasury, there are numerous accounts established for internal accounting
purposes. Although all of the monies within the Treasury are federal monies, the designation of an
account as a trust fund allows the government to track revenues (and expenditures) dedicated for
specific purposes. In addition, the government can affect the level of revenues and expenditures
associated with a trust fund through changes in the law. Social Security program income and
outgo are accounted for in two separate trust funds authorized under Title II of the Social Security
Act: (1) the Federal Old-Age and Survivors Insurance (OASI) trust fund and (2) the Federal
Disability Insurance (DI) trust fund.10 This report refers to the two separate trust funds as an
aggregate Social Security trust fund and discusses the operations of the OASI and DI trust funds
on a combined basis.
Social Security Trust Fund Revenues
The Social Security trust fund receives a credit equal to the Social Security payroll taxes
deposited in the U.S. Treasury by the IRS.11 The payroll taxes are allocated between the OASI
and DI trust funds based on a proportion specified by law. 12 Currently, of the 6.2% payroll tax
rate, 5.3% is allocated to the OASI trust fund and 0.9% is allocated to the DI trust fund.13
Social Security Trust Fund Costs
The U.S. Treasury makes Social Security benefit payments to entitled individuals on a monthly
basis. The Treasury is directed by the Social Security Administration (SSA) as to whom to pay
and the amount of the payment. When benefit payments are made by the Treasury, the Social
Security trust fund is debited for the payments. Periodically, the Social Security trust fund is also
debited for the administrative costs of the Social Security program. These administrative costs are
incurred by several government agencies, including SSA, the U.S. Treasury and the IRS.
Social Security Trust Fund Operations
The annual revenues to the Social Security trust fund are used to pay current Social Security
benefits and administrative expenses. If, in any year, revenues are greater than costs, the surplus
Social Security revenues in the U.S. Treasury are available for spending by the government on
other (non-Social Security) spending needs at the time. If, in any year, costs are greater than
revenues, the cash flow deficit is offset by selling some of the accumulated holdings of the trust
fund (government securities) to help pay benefits and administrative expenses.
10
Social Security Act, Title II, §201.
A portion of the federal income taxes paid on Social Security benefits and the interest income on Social Security trust
fund investments are also credited to the Social Security trust fund.
12
Social Security Act, Title II, §201(b).
13
The share allocated to the DI trust fund was last changed (to 0.9%) in 2000. The proportional split between the OASI
and DI trust funds has been altered five times since 1985.
11
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There are two measures of Social Security trust fund operations: the annual cash flow operations
and the accumulated holdings (or trust fund balance).1214 The annual cash flow operations of the
Social Security trust fund are a measure of current revenues and current costs. The cash flow
operations are positive when current revenues exceed costs (a cash flow surplus) and negative
when current costs exceed revenues (a cash flow deficit). In years with cash flow deficits, the
Social Security program (unlike other federal programs that operate without a trust fund) may use
the accumulated holdings of the Social Security trust fund from prior years to help pay benefits
and administrative expenses.1315
Although Social Security is often referred to as a pay-as-you-go system (meaning that current
revenues are used to pay current costs), changes made to the Social Security program in 1983
began a sustained period of annual cash flow surpluses through 2009.14 The 2010 Annual Report
of the Social Security Board of Trustees, however, projects that the Social Security program will
run cash flow deficits (program costs will exceed tax revenues) in 2010 and 2011, followed by a
return to cash flow surpluses in 2012 to 2014. Beginning in 2015, cash flow deficits are projected
10
Social Security Act, Title II, §201(b).
The share allocated to the DI trust fund was last changed (to 0.9%) in 2000. The proportional split between the OASI
and DI trust funds has been altered five times since 1985.
1216 In 2010, Social Security
had a cash flow deficit (program costs exceeded tax revenues), and the 2011 Annual Report
projects that cash flow deficits will continue throughout the current 75-year projection period
(2011-2085), under the intermediate assumptions.17
The 2011 Annual Report projects that the Social Security trust fund will remain solvent until
2036. Social Security benefits scheduled under current law can be paid in full until that time. This
is one year earlier than projected in the 2010 Annual Report. In addition, the average 75-year
actuarial deficit for the trust fund is projected to be equal to 2.22% of taxable payroll. This is an
increase of 0.30% of taxable payroll from the projection in the 2010 Annual Report. Some of this
change (0.05%) is attributed to a shift in the valuation period (from 2010-2084 to 2011-2085)
which adds the relatively large negative annual balance for 2085 to the projection period. The
remaining 0.25% is attributed to changes in demographic and economic data, assumptions, and
methods, such as a projected increase in life expectancy. The trustees also note that the negative
effect is attributed to near-term lower levels of “net other immigration” and real earnings than
assumed in the 2010 Annual Report.18
As noted above, on a combined basis, the Social Security trust fund is projected to remain solvent
until 2036. Separately, the OASI trust fund is projected to remain solvent until 2038 and the DI
trust fund is projected to remain solvent until 2018. With respect to the DI trust fund, the trustees
state, “Given that the DI Trust Fund is projected to become exhausted in 2018, legislative action
14
The accumulated holdings of the Social Security trust fund in U.S. government obligations are also referred to as the
Social Security trust fund balance.
1315
Certain government projects may be given “budget authority until expended,” which allows the authority to spend
funds on the project to be carried over each year until all of the authority to spend funds has been exhausted.
1416
The Social Security Amendments of 1983 (P.L. 98-21) made a number of program changes, including the coverage
of federal workers, an increase in the full retirement age and the taxation of Social Security benefits. For more
information on the 1983 amendments, see CRS Report RL30920, Major Decisions in the House and Senate on Social
Security: 1935-20092010, by Gary Sidor.
11
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to reemerge and continue throughout the remainder of the 75-year projection period (under the
intermediate assumptions). 1517
The Social Security Board of Trustees is composed of three officers of the President’s cabinet (the Secretary of the
Treasury, the Secretary of Labor and the Secretary of Health and Human Services), the Commissioner of Social
Security and two public representatives who are appointed by the President and subject to confirmation by the Senate.
The Board of Trustees issues an annual report to Congress on the financial status of the Social Security trust fund. The
trustees make three sets of projections based on low-cost, intermediate and high-cost assumptions reflecting the
uncertainty surrounding projections for a 75-year period. The trust fund projections cited in this CRS report are based
on the intermediate (or “best guess”) assumptions of The 2011 Annual Report of the Board of Trustees of the Federal
Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, Washington, DC, May 13, 2011,
available at http://www.ssa.gov/OACT/TR/2011/tr2011.pdf. (Hereafter cited as 2011 Annual Report.)
18
2011 Annual Report, pp. 17-18. For a definition of net other immigration, see pages 81-82.
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will be needed as soon as possible. At a minimum, a reallocation of the payroll tax rate between
OASI and DI would be necessary, as was done in 1994.”19
As shown in Table 1, during the 1957 to 1983 period, the cash flow operations of the Social
Security trust fund (annual revenues less annual costs) were negative in 21 of the 27 years.
Table 1. Annual Revenues, Costs, and Cash Flow Surplus or DeficitSurpluses or Deficits
for the Social Security Trust Fund, 1957-1983
($ in billions)
Year
19
Annual Revenues
(not including
interest)
Annual
Costs
Annual Cash Flow Surplus or Deficit
Surpluses or Deficits
(annual revenues less annual costs)
1957
$7.50
$7.60
($0.10)
1958
8.50
8.90
(0.40)
1959
8.90
10.80
(1.90)
1960
11.90
11.80
0.10
1961
12.30
13.40
(1.10)
1962
13.10
15.20
(2.10)
1963
15.60
16.20
(0.60)
1964
16.80
17.00
(0.20)
1965
17.20
19.20
(2.00)
1966
22.60
20.90
1.70
1967
25.40
22.50
2.90
1968
27.00
26.00
1.00
1969
31.50
27.90
3.60
1970
34.70
33.10
1.60
1971
38.30
38.50
(0.20)
1972
42.90
43.30
(0.40)
1973
51.90
53.10
(1.20)
1974
58.90
60.60
(1.70)
1975
64.30
69.20
(4.90)
1976
71.60
78.20
(6.60)
1977
78.70
87.30
(8.60)
15
The Social Security Board of Trustees is composed of three officers of the President’s cabinet (the Secretary of the
Treasury, the Secretary of Labor and the Secretary of Health and Human Services), the Commissioner of Social
Security and two public representatives who are appointed by the President and subject to confirmation by the Senate.
The Board of Trustees issues an annual report to Congress on the financial status of the Social Security trust fund. The
trustees make three sets of projections based on low-cost, intermediate and high-cost assumptions reflecting the
uncertainty surrounding projections for a 75-year period. The trust fund projections cited in this CRS report are based
on the intermediate (or “best guess”) assumptions of The 2010 Annual Report of the Board of Trustees of the Federal
Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, August 5, 2010, available at
http://www.socialsecurity.gov/OACT/TR/2010/.
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Year
Annual Revenues
(not including
interest)
Annual
Costs
Annual Cash Flow Surplus or Deficit
(annual revenues less annual costs)
1978
88.90
96.00
(7.10)
1979
103.00
107.30
(4.30)
1980
116.70
123.60
(6.90)
1981
139.40
144.40
(5.00)
1982
145.70
160.10
(14.40)
1983
156.30
171.20
1978
88.90
96.00
(7.10)
1979
103.00
107.30
(4.30)
1980
116.70
123.60
(6.90)
1981
139.40
144.40
(5.00)
1982
145.70
160.10
(14.40)
2011 Annual Report, p. 20.
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Year
Annual Revenues
(not including interest)
1983
156.30
Annual
Costs
171.20
Annual Cash Flow
Surpluses or Deficits
(annual revenues less annual costs)
(14.90)
Source: Table prepared by the Congressional Research Service (CRS) from data provided in The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, Washington, DC, August 5, 2010the 2011 Annual
Report, Table VI.A4.
Table 2 shows the actual cash flow operations of the Social Security trust fund (annual revenues,
costs, and cash flow surplussurpluses or deficits) for the 1984 to 20092010 period. Table 3 shows the
projected cash flow
operations of the Social Security trust fund (projected annual revenues, costs,
and cash flow
surplus or deficit deficits) for the 2010 to 20362011 to 2035 period, as projected by the Social Security trustees in the
2010
the 2011 Annual Report (under the intermediate assumptions).
Table 2. Annual Revenues, Costs, and Cash Flow SurplusSurpluses or Deficits
for the Social Security Trust Fund, 1984-20092010
($ in billions)
Year
Annual Revenues
(not including
interest)
Year
1984
$183.10
$180.40
$2.70
1985
197.50
190.60
6.90
1986
212.80
201.50
11.30
1987
225.60
209.10
16.50
1988
255.20
222.50
32.70
1989
276.70
236.20
40.50
1990
301.10
253.10
48.00
1991
307.80
274.20
33.60
1992
317.20
291.90
25.30
1993
327.70
308.80
18.90
1994
350.00
323.00
27.00
1995
364.80
339.80
25.00
1996
385.70
353.60
32.10
1997
413.90
369.10
44.80
1998
439.90
382.30
57.60
1999
471.20
392.90
78.30
2000
504.80
415.10
89.70
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Annual
Costs
Annual Cash Flow Surplus
(annual revenues less annual costs)
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Social Security: The Trust Fund
Year
Annual Revenues
(not including
interest)
2001
529.10
438.90
90.20
2002
546.30
461.70
84.60
2003
546.90
479.10
67.80
2004
568.70
501.60
67.10
2005
607.80
529.90
77.90
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Annual
Costs
Annual Cash Flow
Surpluses or Deficits
(annual revenues less annual costs)
Annual Revenues
(not including interest)
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Annual
Costs
Annual Cash Flow
Surpluses or Deficits
(annual revenues less annual costs)
Year
Annual Revenues
(not including interest)
2006
642.50
555.40
87.10
2007
674.70
594.50
80.20
2008
689.00
625.10
63.90
2009
689.20
685.80
3.40
Annual
Costs
Annual Cash Flow Surplus
(annual revenues less annual costs2010
663.60
712.50
(48.90)
Source: Table prepared by the Congressional Research Service (CRS) from data provided in The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, Washington, DC, August 5, 2010the 2011 Annual
Report, Table VI.A4.
Table 3. Projected Annual Revenues, Costs, and Cash Flow Surplus or DeficitDeficits
for the Social Security Trust Fund, 2010-20362011-2035
($ in billions)
Yeara
Annual Revenues
(not including
interest)
2010
673.10
714.60
(41.40)Annual
Costs
2011
734.80
741.70
(6.90)
2012
781.10
779.30
1.80
2013
832.60
827.40
5.20
2014
885.20
881.30
3.90
2015
937.10
940.1
(3.00)
2016
992.30
1,003.20
(10.90)
2017
1,045.90
1,071.30
(25.40)
2018
1,099.30
1,144.20
(44.90)
2019
1,150.80
1,222.20
(71.40)
2020
1,203.80
1,305.20
(101.40)
2021
1,258.20
1,391.80
(133.60)
2022
1,314.80
1,481.80
(167.00)
2023
1,374.10
1,576.10
(202.00)
2024
1,436.50
1,674.10
(237.60)
2025
1,501.30
1,775.90
(274.60)
2026
1,569.30
1,880.90
(311.60)
2027
1,640.90
1,989.50
(348.60)
Congressional Research Service
Annual
Costs
Annual Cash Flow Surplus or Deficit
(annual revenues less annual costs)
6
Social Security: The Trust Fund
Yeara
Annual Revenues
(not including
interest)
2028
1,715.80
2,101.40
(385.60)
2029
1,793.60
2,215.60
(422.00)
2030
1,875.30
2,332.10
(456.80)
2031
1,961.70
2,452.90
(491.20)
2032
2,051.80
2,577.30
(525.50)
2033
2,145.70
2,705.00
(559.30)
2034
2,243.80
2,835.20
(591.40)
2035
2,346.60
2,968.50
(621.90)
2036
2,454.50
3,106.10
(651.60)
Annual
Costs
Annual Cash Flow Surplus or Deficit
(annual revenues less annual costs)
Source: Table prepared by the Congressional Research Service (CRS) from data provided in The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, Washington, DC, August 5, 2010, Table VI.F8 (intermediate assumptions).
a.
Projections for years after 2036 are not shown because the Social Security trust fund is projected to be
exhausted in 2037$692.80
$738.40
($45.60)
2012
750.70
772.00
(21.30)
2013
794.40
813.80
(19.40)
2014
843.10
860.50
(17.40)
2015
890.10
911.00
(20.90)
2016
939.10
964.80
(25.70)
2017
988.10
1023.10
(35.00)
2018
1,040.00
1086.90
(46.90)
2019
1,090.60
1160.60
(70.00)
2020
1,141.20
1240.40
(99.20)
2021
1,192.60
1323.70
(131.10)
2022
1,246.00
1410.60
(164.60)
2023
1,302.00
1501.50
(199.50)
2024
1,360.80
1596.20
(235.40)
2025
1,421.80
1694.80
(273.00)
2026
1,485.40
1797.00
(311.60)
2027
1,553.00
1903.00
(350.00)
2028
1,623.70
2012.10
(388.40)
2029
1,697.10
2123.30
(426.20)
2030
1,774.20
2236.80
(462.60)
2031
1,856.20
2353.50
(497.30)
2032
1,942.00
2474.50
(532.50)
2033
2,031.50
2598.80
(567.30)
2034
2,124.90
2725.50
(600.60)
Congressional Research Service
Annual Cash Flow Deficits
(annual revenues less annual costs)
7
Social Security: The Trust Fund
Yeara
Annual Revenues
(not including interest)
Annual
Costs
2035
2,222.20
2854.90
Annual Cash Flow Deficits
(annual revenues less annual costs)
(632.70)
Source: Table prepared by the Congressional Research Service (CRS) from data provided in the 2011 Annual
Report, Table VI.F8 (intermediate assumptions).
a.
Projections for years after 2035 are not shown because the Social Security trust fund is projected to be
exhausted in 2036 under the intermediate assumptions.
One way to measure the annual cash flow operations over time is to take the ratio of current
revenues to current costs for each year. A ratio greater than 100% indicates positive cash flow (a
cash flow surplus). Conversely, a ratio less than 100% indicates negative cash flow (a cash flow
deficit). Figure 1 shows the ratio of current revenues to current costs for the Social Security trust
fund over the historical period from 1957 to 20092010 and over the future period from 2010 to 20362011 to 2035,
as projected by the Social Security trustees in the 20102011 Annual Report (under the intermediate
assumptions).1620
As shown in the figure, in 2009, revenues of $689.2 billion divided by costs of $685.8 billion
results in a ratio just over 100% (100.5%), indicating a cash flow surplus for the Social Security
trust fund. By comparison, in 2020, projected2010, revenues of $1.2 trillion663.6 billion divided by projected costs
of $1.3 trillion of
$712.5 billion results in a ratio of 9293%, indicating a cash flow deficit for the Social Security trust
fund. In the 20102011 Annual Report, the Social Security trustees project that the ratio of current
revenues to current costs will fall below 100% in 2010 and 2011 and again starting in 2015remain below 100% for the remainder of the projection period, with
the gap between revenues and costs increasing over time (under the intermediate assumptions).
16
The 2010 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds, Washington, DC, August 5, 201020
2011 Annual Report, Tables VI.A4 and VI.F8 (intermediate
assumptions).
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Social Security: The Trust Fund
Figure 1. Ratio of Current (Annual) Revenues to Costs
for the Social Security Trust Fund, 1957-20362035
125%
Ratio
120%
115%
110%
105%
100%
95%
90%
85%
Historical Period
(1957-2009)
80%
Projected Period
(2010-2036)Projected Period
(2011-2035)
Historical Period
(1957-2010)
80%
2034
2027
2020
2013
2006
1999
1992
1985
1978
1971
1964
1957
75%
Source: Figure prepared by the Congressional Research Service (CRS) from data provided in The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, Washington, DC, August 5, 2010the 2011 Annual
Report, Tables VI.A4 and VI.F8 (intermediate assumptions).
Notes: Annual revenues do not include interest on accumulated holdings of U.S. government obligations. A ratio
above 100% indicates a cash flow surplus for the year. A ratio below 100% indicates a cash flow deficit.
When the Social Security trust fund operates with a cash flow deficit, benefits can continue to be
paid by the Treasury at levels scheduled under current law as long as the accumulated balance in
the Social Security trust fund is positive. This is because the Social Security program has budget
authority to pay benefits as long as the balance in the Social Security trust fund (the designated
account) is positive. However, when current revenues are not sufficient to pay benefits, the U.S.
government must raise the funds necessary to honor the redemption of U.S. government
obligations held by the Social Security trust fund as they are needed to pay benefits. If there are
no surplus governmental receipts, the U.S. government may raise the necessary funds by
increasing taxes or other income, reducing other spending, borrowing from the public (i.e.,
replacing bonds held by the trust fund with bonds held by the public), or some combination of
these optionsmeasures.
Investment of the Social Security Trust Fund
The Secretary of the Treasury is required by law to invest Social Security revenues in securities
backed by the U.S. government.1721 In addition, the Social Security trust fund receives interest on
1721
Social Security Act, Title II, §201(d).
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Social Security: The Trust Fund
its holdings of special U.S. government obligations. Each government security issued by the
Treasury for purchase by the Social Security trust fund must be a paper instrument in the form of
a bond, note, or certificate of indebtedness. 1822 Any interest or proceeds from the sale of government
government securities held by the Social Security trust fund must be paid in the form of paper
checks from the
general fund of the Treasury to the Social Security trust fund. 1923 The interest rates
paid on the
government securities issued to the Social Security trust fund are tied to market
rates.2024
For internal federal accounting purposes, when special U.S. government obligations are
purchased by the Social Security trust fund, the Treasury is shifting surplus Social Security
revenues from one government account (the Social Security trust fund) to another government
account (the Treasury’s “general fund” account). The special U.S. government obligations are
physical documents held by the Social Security Administration, not the U.S. Treasury. The
government securities held by the Social Security trust fund are redeemed on a regular basis.
These special U.S. government obligations, however, are not resources for the government
because they represent both an asset and a liability for the government.
The Social Security Trust Fund and the Federal Budget
The Social Security program is indirectly part of the annual congressional budget process. This
creates some confusion on the part of the public.
On-Budget Versus Off-Budget
For federal budget purposes, on-budget status generally refers to programs that are included in the
annual congressional budget process, whereas off-budget status generally refers to programs that
are not included in the annual congressional budget process.
The Social Security program is a government program that, like the Postal Service, has had its
receipts and (most) outlays designated by law as off-budget.2125 The off-budget designation,
however, has no practical effect on program funding, spending or operations. The annual
congressional budget resolution, in its legislative language, separates the off-budget totals
(receipts and outlays) from the on-budget totals (receipts and outlays). The report language
accompanying the congressional budget resolution usually shows the unified budget totals (which
combine the on- and off-budget amounts) as well as the separate on- and off-budget totals. The
President’s budget tends to use the unified budget measures in discussing the budget totals. The
President’s budget documents also include the totals for the on- and off-budget components, as
required by law. The Congressional Budget Office uses the unified budget numbers in its analyses
of the budget; it generally does not include on- and off-budget data in its regular annual reports.
18
22
Social Security Act, Title II, §201(d). The Social Security trust fund may purchase certain other government
securities, such as those issued by Fannie Mae or Freddie Mac, but this option is seldom used.
1923
Social Security Act, Title II, §201(f). The funds are then used to purchase additional government securities credited
to the Social Security trust fund.
2024
For more information, see CRS Report RS20607, Social Security: Trust Fund Investment Practices, by Dawn
Nuschler.
2125
Although the Social Security program is off-budget, the annual congressional budget process does provide the budget
authority for Social Security administrative spending. SSA’s administrative funding, which is paid for out of the Social
Security trust fund, is subject to an annual appropriated limit. In contrast, the Social Security program has budget
authority to pay benefits as long as the balance in the Social Security trust fund (the designated account) is positive.
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Social Security: The Trust Fund
required by law. The Congressional Budget Office uses the unified budget numbers in its analyses
of the budget; it generally does not include on- and off-budget data in its regular annual reports.
The unified budget framework is important because it includes all federal government revenues
and expenditures providing a more comprehensive picture of the size of the federal government,
as well as the impact of the federal budget on the economy. In the unified budget, the Social
Security program is a large source of both federal government revenues (3129% in FY2009FY2010) and
expenditures (1920% in FY2009).22FY2010).26 For purposes of the unified budget, the annual Social Security
cash flow surplus or deficit is counted in determining the overall federal budget surplus or deficit.
The Social Security Trust Fund as Accumulated
Holdings
The Social Security trust fund can be (and often is) viewed as a trust fund, similar to any private
trust fund, that is to be used for paying current and future benefits (and administrative expenses).
By law, Social Security revenues credited to the trust fund (within the U.S. Treasury) are invested
in non-marketable U.S. government obligations. These obligations are physical (paper)
documents issued to the trust fund and held by the Social Security Administration. When the
obligations are redeemed, the Treasury must issue a check (a physical document) to the Social
Security trust fund for the interest earned on the obligations.2327
However, unlike a private trust that may hold a variety of assets and obligations of different
borrowers, the Social Security trust fund can hold only non-marketable U.S. government
obligations. The sale of these obligations by the U.S. government to the Social Security trust fund
is federal government borrowing (from itself) and counts against the federal debt limit. The
requirement that the Social Security trust fund purchase U.S. government obligations serves
several purposes, such as:
•
offering a mechanism for the Social Security program to recoup the surplus
revenues loaned to the rest of the government,;
•
paying interest so that the loan of the surplus revenues does not lose value over
time,;
•
ensuring that the Social Security trust fund (and not other government accounts)
receives credit for the interest earnings,;
•
ensuring a level of return (interest) to the Social Security trust fund,; and
•
providing a means outside of the securities market for the U.S. government to
borrow funds.
The accumulated holdings of the Social Security trust fund represent the sum of annual surplus
Social Security revenues (for all past years) which were invested in U.S. government obligations,
plus the interest earned on those obligations. As a result of surplus Social Security revenues for
the past 26 years (1984 to 2009) and the interest income credited to the Social Security trust fund,
the accumulated holdings of the Social Security trust fund totaled $2.5 trillion at the end of
calendar year 2009. It is the accumulated holdings of the Social Security trust fund (or the trust
22from
26
Percentages calculated by the Congressional Research Service (CRS) from data provided in: Office of Management
and Budget, Historical Tables, Budget of the U.S. Government, Fiscal Year 20112012, Tables 2.1, 2.4, 6.1 and 13.1.
2327
The funds are then used to purchase additional government securities credited to the Social Security trust fund.
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Social Security: The Trust Fund
fund balance) that many 11
Social Security: The Trust Fund
1984 to 2009 and the interest income credited to the Social Security trust fund, the accumulated
holdings of the Social Security trust fund totaled $2.6 trillion at the end of calendar year 2010. It
is the accumulated holdings of the Social Security trust fund (or the trust fund balance) that many
people refer to when discussing the Social Security trust fund. Table 4
shows the accumulated
holdings of the Social Security trust fund for the historical period from
1957 to 20092010. Table 5
shows the accumulated holdings of the Social Security trust fund for the
future period from 2010 to 20362011
to 2035, as projected by the Social Security trustees in the 20102011 Annual
Report (under the
intermediate assumptions). The Social Security trustees project that the level of
accumulated accumulated
holdings will begin to decline in 20252023 and that the Social Security trust fund will be
exhausted in 2037.24
2036.28
The Social Security trustees project that, on average over the next 75 years (2010 to 20842011 to 2085),
program costs will exceed total income (tax revenues plus interest income) by an amount equal to
1.922.22% of taxable payroll (on average, costs are projected to exceed income by 14%).2516%).29 The gap
between income and costs, however, is projected to increase over the 75-year projection period.
For example, in 2035, the cost of the program is projected to exceed income by an amount equal
to 3.5077% of taxable payroll (costs are projected to exceed income by 2628%). By the end of the
projection period, in 20842085, the cost of the program is projected to exceed income by an amount
equal to 4.1224% of taxable payroll (costs are projected to exceed income by 3132%).
The Social Security trustees project that the Social Security trust fund would remain solvent
throughout the 75-year projection period, for example, if:
•
the combined employer and employee payroll tax rate were increased during the
period in a manner equivalent to an immediate increase of 1.842.15 percentage points
(from 12.4% to 14.24%);2655%);30
•
benefits scheduled under current law were reduced during the period in a manner
equivalent to an immediate benefit reduction of 1213.8%; or
•
general revenue transfers equivalent to $5.46.5 trillion (in present value terms) were
made to the Social Security trust fund during the period.
These potential revenue and benefit changes illustrate the magnitude of changes needed for the
Social Security trust fund to remain solvent throughout the 75-year projection period. The Social
Security trustees point out that some combination of these approaches could be used and that
larger changes would be needed to maintain trust fund solvency beyond the 75-year period.27
24
28
Under the intermediate assumptions of the 20102011 Annual Report, the Social Security trustees project that program
costs will exceed total income (tax revenues plus interest income) beginning in 20252023. At that point, the trust fund
balance will begin to be drawn down to help pay benefits and administrative expenses. The trustees project that the
assets (government securities) held by the trust fund will be depleted in 2037exhausted in 2036. Following projected trust fund
exhaustion, the program would continue to operate with annual tax revenues.
2529
Program costs and income are evaluated as a percentage of taxable payroll because Social Security payroll taxes are
the primary source of funding for the program. The projected 75-year actuarial deficit (1.922.22% of taxable payroll)
represents $5.46.5 trillion in present value terms.
2630
The Social Security trustees note that the projected increase in the payroll tax rate needed for the trust fund to remain
solvent throughout the 75-year projection period (1.842.15 percentage points) differs from the projected 75-year actuarial
deficit (1.922.22% of taxable payroll) for two reasons. The 2010 Annual Report states on page 4: “First, the necessary tax
rate is thattrustees state on page 4 of the 2011 Annual Report: “First, the
necessary tax rate is the rate required to maintain solvency throughout the period, but not to that would result in any trust fund
reserve at the end of
the period. Second, the necessary tax rate is increased based on the expectation that any change in
tax rates will affect
the proportion of employee compensation that is paid in wages.”
27
The 2010 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds, Washington, DC, August 5, 2010, p. 4.
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Social Security: The Trust Fund
paid in wages.”
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Social Security: The Trust Fund
Security trustees point out that some combination of these approaches could be used and that
larger changes would be needed to maintain trust fund solvency beyond the 75-year period.31
Table 4. Accumulated Holdings of the
Social Security Trust Fund, 1957-20092010
($ in billions)
Congressional Research Service31
Year
Accumulated
Holdingsa
1957
$23.00
1958
23.20
1959
22.00
1960
22.60
1961
22.20
1962
20.70
1963
20.70
1964
21.20
1965
19.80
1966
22.30
1967
26.30
1968
28.70
1969
34.20
1970
38.10
1971
40.40
1972
42.80
1973
44.40
1974
45.90
1975
44.30
1976
41.10
1977
35.90
1978
31.70
1979
30.30
1980
26.50
1981
24.50
1982
24.80
1983
24.90
1984
31.10
1985
42.20
2011 Annual Report, pp. 3-4.
Congressional Research Service
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Social Security: The Trust Fund
Year
Accumulated
Holdingsa
1986
46.90
1987
68.80
1988
109.80
1989
163.00
1990
225.30
12
Social Security: The Trust Fund
Year
Accumulated
Holdingsa
1991
280.70
1992
331.50
1993
378.30
1994
436.40
1995
496.10
1996
567.00
1997
655.50
1998
762.50
1999
896.10
2000
1,049.40
2001
1,212.50
2002
1,378.00
2003
1,530.80
2004
1,686.80
2005
1,858.70
2006
2,048.10
2007
2,238.50
2008
2,418.70
2009
2,540.30
2010
2,609.00
Source: Table prepared by the Congressional Research Service (CRS) from data provided in The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, Washington, DC, August 5, 2010the 2011 Annual
Report, Table VI.A4.
a.
The accumulated holdings of the Social Security trust fund are also referred to as the trust fund balance.
Table 5. Projected Accumulated Holdings of the
Social Security Trust Fund, 2010-20362011-2035
($ in billions)
Yeara
Congressional Research Service
Yeara
Accumulated
Holdingsb
2010
$2,617.00
2011
2,730.10
2012
2,858.80
2013
3,001.00
2014
3,152.70
2015
3,308.50
2016
3,467.80
2017
3,624.60
2018
3,773.70
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Social Security: The Trust Fund
Yeara
Accumulated
Holdingsb
2019
3,906.60
2020
4,018.70
2021
4,106.80
2022
4,168.30
2023
4,200.20
2024
4,200.40
2025
4,162.50
2026
4,084.50
2027
3,964.10
2028
3,798.80
2029
3,586.60
2030
3,326.40
2031
3,015.90
2032
2,652.40
2033
2,233.30
2034
1,757.10
2035
1,222.00
2036
625.502011
$2,678.20
2012
2,773.00
2013
2,874.30
14
Social Security: The Trust Fund
Yeara
Accumulated
Holdingsb
2014
2,983.70
2015
3,096.10
2016
3,210.20
2017
3,322.20
2018
3,431.30
2019
3,526.10
2020
3,599.10
2021
3,648.90
2022
3,673.20
2023
3,669.20
2024
3,634.40
2025
3,565.50
2026
3,453.00
2027
3,294.60
2028
3,087.50
2029
2,829.80
2030
2,519.90
2031
2,156.50
2032
1,735.90
2033
1,255.40
2034
713.00
2035
106.20
Source: Table prepared by the Congressional Research Service (CRS) from data provided in The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, Washington, DC, August 5, 2010the 2011 Annual
Report , Table VI.F8 (intermediate assumptions).
a.
Projections for years after 20362035 are not shown because the Social Security trust fund is projected to be
exhausted in 20372036 under the intermediate assumptions.
b.
The accumulated holdings of the Social Security trust fund are also referred to as the trust fund balance.
The Social Security Trust Fund and the Level of Federal Debt
As part of the annual congressional budget process, the level of federal debt (the federal debt
limit) is set for the budget by Congress. The federal debt limit includes debt held by the public as
well as the internal debt of the U.S. government (i.e., debt held by government accounts).
Borrowing from the public and the investment of the Social Security trust fund in special U.S.
government obligations both fall under the restrictions of the federal debt limit. This means that
the Social Security trust fund balance may have implications for the federal debt limit. The sale of
government securities to the Social Security trust fund is a transaction between federal accounts;
it does not generate any resources for the government. It is the interest payments on federal debt
held by the public that is considered the more relevant measure of the impact of the federal
budget on the economy.
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Social Security: The Trust Fund
The Social Security Trust Fund and Federal Default
The special obligations purchased by the Social Security trust fund are backed by “the full faith
and credit” of the U.S. government. This is a promise by the U.S. government to redeem the
securities (debt instruments). Technically, like any other borrower, the federal government could
default on any or all of its outstanding obligations. The implications for the economy, and for the
private market for government securities, of a federal government default on the special
obligations held by the Social Security trust fund would depend on the views of private investors.
The impact would be determined by whether private investors think this is a precursor to a federal
government default on securities held by the public (a general government default). There is no
precedent for a federal government default, which makes it difficult to predict the implications.
The Social Security Trust Fund and has implications for the federal debt limit.
For a discussion of how reaching the debt limit potentially could affect Social Security trust fund
investment practices and benefit payments, see CRS Report R41633, Reaching the Debt Limit:
Background and Potential Effects on Government Operations, coordinated by Mindy R. Levit.
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Social Security: The Trust Fund
The Social Security Trust Fund and Benefit Payments
The accumulated holdings of the Social Security trust fund, which represent budget authority for
the program, can be viewed as a measure of funds dedicated to pay current and future benefits.
However, when revenues are projected to becurrent tax revenues are below levels needed to pay benefits in 2010, 2011,
and again beginning in 2015,28 these funds will be,32 these funds (the
accumulated holdings) are available to pay benefits only as the
government raises the resources
necessary to pay for the securities as they are redeemed by the
Social Security trust fund. The
securities are a promise, by the U.S. government, to raise the
necessary funds.2933 When the system
is operating with a cash flow surplus, the surplus Social
Security revenues (which are invested in
government securities held by the trust fund) are used to
fund other government activities at the
time. The surplus Social Security revenues, therefore, are
not available to finance benefits directly
when the system is operating with a cash flow deficit.
Stated another way, when the Social Security trust fund runs a cash flow deficit, the trust fund
cashes in more federal government securities than the amount of current Social Security tax
revenues. Because general revenues are used to redeem the federal government securities held by
the trust fund, this results in increased spending for Social Security from the general fund. With
respect to the Social Security program’s reliance on general revenues, it is important to note that
the program is relying on revenues collected for Social Security purposes in previous years that
were used by the federal government at the time for other (non-Social Security) spending needs.
The program draws on those previously collected Social Security tax revenues (plus interest)
when current Social Security tax revenues fall below current program expenditures.
The Social Security trustees project that the accumulated holdings of the Social Security trust
fund will be exhausted in 20372036 and that an estimated 7877% of annual benefits scheduled under
current law will be payable with incoming receipts at that time (based on the intermediate
assumptions of the 20102011 Annual Report). The Social Security Act does not state what would
happen to the payment of benefits scheduled under current law in the event of Social Security
28
In the 2010 Annual Report, the Social Security trustees project that revenues will fall below program costs in 2010
and 2011, followed by a return to cash flow surpluses in 2012 to 2014. The trustees project that revenues will fall
below program costs again in 2015 and each year thereafter through the end of the 75-year projection period (under the
intermediate assumptions).
29
trust fund exhaustion. Two possible scenarios are the payment of monthly benefits in full on a
delayed schedule or the payment of partial (reduced) monthly benefits on time. 34
Acknowledgments
This report was originally written by Christine Scott.
32
In the 2011 Annual Report, the Social Security trustees project that revenues will remain below program costs each
year throughout the 75-year projection period (2011-2085), under the intermediate assumptions.
33
If there are no surplus governmental receipts, the U.S. government may raise the necessary funds by increasing taxes
or other income, reducing other spending, borrowing from the public (i.e., replacing bonds held by the trust fund with
bonds held by the public), or some combination of these options.
Congressional Research Service
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Social Security: The Trust Fund
trust fund exhaustion. Two possible scenarios are the payment of monthly benefits in full on a
delayed schedule or the payment of partial (reduced) monthly benefits on time. 30
Author Contact Information
Dawn Nuschler
Specialist in Income Security
dnuschler@crs.loc.gov, 7-6283
Gary Sidor
Information Research Specialist
gsidor@crs.loc.gov, 7-2588
Acknowledgments
This report was originally written by Christine Scott.
30
For information on the legal entitlement to benefits and trust fund exhaustionmeasures.
34
For related information, see CRS Report RL32822, Social
Security Reform: Legal Analysis of Social Security Benefit
Entitlement Issues, by Kathleen S. Swendiman and Thomas
J. Nicola; and CRS Report RL33514, Social Security: What Would Happen If the Trust Funds Ran Out?, by Christine
Scott J. Nicola.
Congressional Research Service
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