For SSI, an appropriate relative measure of program costs is produced by comparing estimated annual SSI costs to the
Gross Domestic Product (GDP)1. In addition to providing an inflation-independent measure of the cost of the SSI program, this provides a useful perspective on the proportion of the total output of the U.S. economy needed to provide Federal SSI benefits. As is shown in table
IV.D1 and figure
IV.D1, the total cost of the SSI program is projected to be relatively constant through 2013 and then decline afterwards, relative to GDP.
Table IV.D1 and figure
IV.D1 present a concise summary of Federal expenditures under the SSI program. Following the initial higher costs of the program, total Federal SSI payments during the 1980s were a fairly constant percentage of GDP (0.21 percent). During the early 1990s, SSI experienced rather rapid growth (to 0.34 percent of GDP in 1996) due to a combination of factors discussed earlier in section IV. Legislation enacted in 1996
2 resulted in a drop in the cost of SSI as a percentage of GDP beginning in 1997 and continuing through 2000. The share of GDP devoted to Federal SSI expenditures increased slightly after the turn of the century in part in response to a slowdown in economic growth over that period, but resumed its very gradual downward trend after 2002 due to relatively slower growth in SSI participation. In the future, Federal SSI expenditures, after adjusting for growth in prices, are projected to grow slightly faster than the population due to some estimated growth in the SSI recipient population as a percentage of the overall U.S. population, as discussed previously in section IV.C. However, since the real growth projected for GDP under the 2008 Trustees Report intermediate assumptions is greater than the effect of these projected increases in SSI participation, Federal SSI payments are projected to decline as a percentage of GDP over the next 25 years, reaching 0.25 percent of GDP by 2032.
