Analysis of the Social Security Trustees Report
April 23, 2012
Today, the Social Security and Medicare Trustees released their 2012 report on the financial status of Social Security and Medicare, showing that reforms will be needed soon to make these programs sustainable.
Subsequent analysis will focus on the state of Medicare. Looking at the Social Security Trustees report, we find that:
- Social Security as a whole is on an unsustainable path. The program faces an actuarial imbalance of 0.96 percent of GDP (2.67 percent of payroll) over 75 years and a deficit of1.54 percent of GDP (4.5 percent of payroll) in the 75thyear.
- Social Security's financial status has deteriorated significantly since last year's report -- when the 75-year shortfall was projected to be 0.8 percent of GDP and 2.22 percent of payroll. This difference is due mainly to changes in economic assumptions resulting in lower income projections.
- As a whole, the Social Security trust funds will be exhausted by 2033 -- compared to 2036 in last year's report -- at which point all beneficiaries will experience a 25 percent benefit cut.
Click here to read the online version of this release.