According to the 2011 Board of Trustees Report for the Social Security and Medicare Trust Funds issued in May 2011, the Social Security Trust Funds remain relatively stable, although the impact of the recession has resulted in some changes from last year’s report. The 2011 report finds that, if no action is taken, the Trust Funds will be able to pay 100% of scheduled benefits until 2036, one year earlier than found in the 2010 Report. Even if no action is taken, scheduled benefits would still be paid at a reduced level of 77% starting in 2037 using incoming payroll tax revenue.
There are two Trust Funds – the Old Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance Trust Fund, but they are treated as a single Trust fund for most purposes. The Board of Trustees, who issues the annual report, is made up of the Secretaries of Labor, Treasury, and Health and Human Services; the Commisioner of Social Security; and two trustees who represent the public and are from different political parties. The Social Security Act requires the Board of Trustees to issue an annual report to Congress.
The current forecast by the Trustees is similar to those of past years. Using intermediate assumptions – considered the “best estimate” – and projecting over the next 75 years, the trust fund will continue to build up reserves through a surplus until 2022. The longrange shortfall is 2.22 percent of taxable payroll, or in other terms, 0.8 percent of Gross Domestic Product (GDP) over the next 75 years.
A more problematic issue, at least on the surface, is that the Report finds that the Disability Insurance Trust Fund will be depleted in 2018. The much larger OASI Trust Fund is solvent through 2038. A recent paper by the Center on Budget and Policy Priorities (CBPP) points out that the increase in the number of Social Security Disability Insurance beneficiaries is not surprising, when compared to the increase in the working population.
Rectifying the imbalance between the Trust Funds has occured in the past. Congress can act to reallocate more of the payroll tax to the Disability Insurance Trust Fund from the OASI Trust Fund. In a 1994 reallocation, Congress expected the Disability Trust Fund to stay solvent just until 2016. The Trustees now project solvency of the Disability Trust Fund until 2018. The Trusteees and other policy makers advise that Congress should act sooner than later to ensure the Trust Fund’s solvency.
An easy to understand paper on the 2011 Trustees Report is available at http://www.nasi.org/.
For more information on Social Security Disability/SSI claims in Southern Nevada contact the offices of Gerald M. Welt at (702) 382-2030 or go to https://www.lasvegassocialsecuritydisability.com/.