2. Estimates as a Percentage of Gross Domestic ProductThis section presents long-range projections of the operations of the combined Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds and of the Hospital Insurance (HI) Trust Fund, expressed as a percentage of gross domestic product (GDP). While expressing fund operations as a percentage of taxable payroll is a very useful approach for assessing the financial status of the programs (see section IV.B.1), expressing them as a percentage of the total value of goods and services produced in the United States provides an additional perspective.Table VI.G4 shows non-interest income, total cost, and the resulting balance of the combined OASI and DI Trust Funds, of the HI Trust Fund, and of the combined OASI, DI, and HI Trust Funds, expressed as percentages of GDP on the basis of each of the three alternative sets of assumptions. Table VI.G4 also contains estimates of GDP. For OASDI, non-interest income consists of payroll tax contributions, proceeds from taxation of scheduled OASDI benefits, and any reimbursements from the General Fund of the Treasury. Cost consists of scheduled benefits, administrative expenses, financial interchange with the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries. For HI, non-interest income consists of payroll tax contributions (including contributions from railroad employment), up to an additional 0.9 percent tax on earned income for relatively high earners, proceeds from taxation of scheduled OASDI benefits, premium revenues, monies from fraud and abuse control activities, and any reimbursements from the General Fund of the Treasury. Cost consists of outlays (benefits and administrative expenses) for beneficiaries. The Trustees show income and cost estimates generally on a cash basis for the OASDI program^{1}and on an incurred basis for the HI program.The summarized long-range (75-year) actuarial balance as a percentage of GDP for the combined OASDI and HI programs varies among the three alternatives by a relatively large amount, from a positive actuarial balance of 0.54 percent under the low-cost assumptions to an actuarial deficit of 4.56 percent under the high-cost assumptions. The 25-year summarized actuarial balance varies by a smaller amount, from a positive actuarial balance of 0.02 percent of GDP to an actuarial deficit of 2.67 percent. Summarized rates are calculated on a present-value basis. They include the trust fund reserve balances on January 1, 2022 and the cost of reaching a target trust fund level equal to 100 percent of the following year’s annual cost at the end of the period. (See section IV.B.4 for further explanation.)

Income^{a} Income^{a} Summarized rates:^{c}

Summarized rates are calculated on a present-value basis. They include the value of the trust funds on January 1, 2022 and the cost of reaching a target trust fund level equal to 100 percent of annual cost at the end of the period.

Table VI.G5 displays annual ratios of OASDI taxable payroll to GDP. These ratios facilitate comparisons of trust fund operations expressed as percentages of taxable payroll and those expressed as percentages of GDP. HI taxable payroll is 26 percent larger than the OASDI taxable payroll on average over the long-range period; see section 1 of this appendix for a detailed description of the difference. For each year, the cost as a percentage of GDP is equal to the cost as a percentage of taxable payroll multiplied by the ratio of taxable payroll to GDP.

Projections of GDP reflect projected increases in U.S. employment, labor productivity, average hours worked, and the GDP price index (GDP deflator). Projections of taxable payroll reflect the components of growth in GDP along with assumed changes in the ratio of total labor compensation to GDP, the ratio of earnings to total labor compensation, the ratio of OASDI covered earnings to total earnings, and the ratio of taxable to total covered earnings.

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