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Thursday March, 30, 2000

Cathy Noe

For Immediate Release

410-965-8904 FAX 410-966-9973

Social Security Online


News Release

Social Security Trust Funds Gain Three Additional Years of Solvency

The Social 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.

In its 60th report to the Congress, the Trustees also reported the following:

  • The Old-Age and Survivors and Disability Insurance Trust Funds paid benefits amounting to $385.8 billion in 1999 and there were 44.6 million beneficiaries on the rolls at the end of 1999; ·
  • In 1999 an estimated 152 million people worked in jobs covered by Social Security; ·
  • Income to the combined trust funds amounted to $526.6 billion in 1999 and expenditures were $392.9 billion, increasing the assets of the combined funds by $133.7 billion to $896.1 billion at the end of December 1999; ·
  • Interest earned on the invested assets of the combined trust funds was $55.5 billion in 1999, representing an effective annual interest rate of 6.9 percent. The average interest rate on new securities purchased by the trust funds was 5.9 percent; and ·
  • Administrative expenses were $3.3 billion in 1999, or about 0.9 percent of benefit payments for the year.

The Board of Trustees is composed of six members, four of whom serve automatically by virtue of their positions with the Federal Government: the Secretary of the Treasury, who is the managing Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security. The other two members are appointed by the President and confirmed by the Senate to serve as public representatives: Stephen G. Kellison and Marilyn Moon. William A. Halter, Deputy Commissioner of Social Security, serves as Secretary to the Social Security Board of Trustees.

See Statement by Kenneth S. Apfel, Commissioner of Social Security

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