2003 OASDI Trustees Report
The report's major findings are summarized below.
At the end of 2002, 46 million people were receiving benefits: 32 million retired workers and their dependents, 7 million survivors of deceased workers, and 7 million disabled workers and their dependents. During the year an estimated 153 million people had earnings covered by Social Security and paid payroll taxes. Total benefits paid in 2002 were $454 billion. Income was $627 billion, and assets held in special issue U.S. Treasury securities grew to $1.4 trillion.
The OASI and DI Trust Funds, individually and combined, are adequately financed over the next 10 years under the intermediate assumptions. The combined assets of the OASI and DI Trust Funds are projected to increase from $1,378 billion at the beginning of 2003, or 288 percent of annual expenditures, to $3,556 billion at the beginning of 2012, or 452 percent of annual expenditures in that year. Combined assets were projected in last year's report to rise to 288 percent of annual expenditures at the beginning of 2003, and 505 percent at the beginning of 2012.
Under the intermediate assumptions the combined OASI and DI Trust Funds are projected to become exhausted in 2042. The projected actuarial deficit is 1.92 percent of taxable payroll, 0.04 percentage point larger than in last year's report. Between about 2010 and 2030, OASDI costs will increase rapidly due to the retirement of the large baby-boom generation, and annual costs will exceed tax income starting in 2018. After 2030, increases in life expectancy and relatively low fertility rates will continue to increase Social Security system costs, but more slowly. The OASDI annual cost rate is projected to increase from 10.89 percent of taxable payroll in 2003 to 19.92 percent in 2077, or 6.50 percent of taxable payroll more than the projected income rate. Expressed in relation to the projected gross domestic product (GDP), OASDI costs are estimated to rise from the current level of 4.4 percent of GDP to 7.0 percent in 2077. Separately, the DI fund is projected to be exhausted in 2028 and the OASI fund in 2044.
The combined OASDI Trust Funds are projected to become insolvent in 2042 under the long-range intermediate assumptions. For the trust funds to remain solvent throughout the 75-year projection period, the combined payroll tax rate could be increased immediately by 1.92 percentage points, benefits could be reduced immediately by 13 percent, a transfer of $3.5 trillion in general revenue (in net present value) could be made, or some combination of approaches could be adopted. Significantly larger changes, would be required to achieve solvency beyond 75 years.