Social Security Trust Funds Gain Three Additional Years of Solvency
Security Board of Trustees today released their
annual report revealing that the Social Security program's
long-range financial picture has improved since last year. Specifically,
the Board announced that the Social Security trust fund assets
will not be depleted until 2037--three years later than reported
in last year's report.
"In the era of growing surpluses, the President has made the difficult decision to call for using these surpluses to improve our Nation's fiscal position," stated Secretary of Treasury Lawrence H. Summers. "Fiscal discipline has contributed enormously to the current economic expansion. We must continue with fiscal discipline and use the benefits to strengthen Social Security and Medicare."
As they did last year, the Trustees urged bipartisan legislative action to restore the long-term balance to Social Security.
"While today's news is positive, we must not delude ourselves with wishful thinking. The Social Security Trust Funds simply will not fix themselves," said Kenneth S. Apfel, Commissioner of Social Security. "Our strong economy gives us a window of opportunity to strengthen Social Security for future generations of workers. It would be a big mistake to kick the can down the road twenty or thirty years and place an undue burden on our children and grandchildren."
In his State of the Union Address, President Clinton proposed locking away Social Security surpluses, paying down the national debt and dedicating interest savings to Social Security which would extend solvency from 2037 to 2054. In addition, the President recommended investing a small share of the Trust Funds in equities to further extend the life of the Trust Funds. To achieve a 75-year actuarial balance in the trust fund, the President again this year called on Congress to work with him on a bipartisan basis to make the changes necessary to strengthen the Social Security program.
The annual report also indicates that in 2015, trust fund expenditures will begin to exceed tax revenues, a year later than estimated in 1999. Beginning in 2025, trust fund assets will be drawn down to pay benefits until exhaustion in 2037. Over the 75-year long-range actuarial forecast, the projected actuarial balance is a deficit of 1.89 percent of taxable payroll, compared to 2.07 percent projected in 1999.