SOCIAL SECURITY
News Release
2006 Trustees Report – Long-Term Financing
Challenges Remain
The 2006 Social Security Trustees Report shows little change
in the projected financial status of the Social Security program
over last year. The Trustees Report projects that the Social Security
Trust Funds will be exhausted in 2040 – one year sooner than last
year’s projection. And, as they have done for more than a
decade, the Trustees recommend that projected trust fund deficits
be addressed in a timely way to allow for gradual changes and advance
notice to workers.
In the 2006 Annual Report to Congress, the Trustees announced:
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The projected point at which tax revenues will fall below
program costs comes in 2017 -- the same as the estimate in
last year’s
report.
-
The projected point at which the Trust Funds will be exhausted
comes in 2040 -- one year earlier than the projection in last
year’s report.
-
The projected actuarial deficit over the 75-year long-range
period is 2.02 percent of taxable payroll -- up .09 percent
from last year’s report.
-
Over the 75-year period, the Trust Funds require additional
revenue equivalent to $4.6 trillion in today’s dollars
to pay all scheduled benefits. This unfunded obligation is
$600 billion higher than the amount estimated last year.
“With the release of this report, we have another opportunity
to send a signal to younger generations of Americans that we, as
a society, are committed to strengthening this important program
for them,” said Jo Anne Barnhart, Commissioner of Social
Security. “Looking ahead, the financing problems facing
Social Security will be challenging to address. Reflecting back,
our nation has a proud history of grappling with difficult issues.
And we do it best when we work together. I believe Social Security,
a program that touches the lives of almost every American, deserves
nothing less.”
Other highlights of the Trustees Report include:
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Income including interest to the combined Old-Age and Survivors,
and Disability Insurance (OASDI) Trust Funds amounted to $702
billion in 2005 -- a $44 billion increase from 2004.
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During the year, an estimated 159 million people had earnings
covered by Social Security and paid payroll taxes.
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The Trust Funds paid benefits of nearly $521 billion in calendar
year 2005 -- an increase of $27 billion from 2004. There were
48 million beneficiaries at the end of the calendar year.
-
The cost of $5.3 billion to administer the program in 2005
was a very low 1.0 percent of total expenditures.
-
Total expenditures from the combined OASDI Trust Funds amounted
to $530 billion in 2005.
-
The assets of the combined OASDI Trust Funds increased by $172
billion in 2005 to a total of $1.86 trillion.
-
Interest earned on the invested assets of the combined Trust
Funds was $94 billion in 2005. The combined Trust Fund assets
earned interest at an effective annual rate of 5.5 percent.
-
Trust Fund exhaustion is one year sooner and the unfunded
obligation is higher than last year’s report largely
because of the passage of a year and small revisions to several
key assumptions including a lower assumed real interest rate.
The Board of Trustees is comprised of six members. Four serve
by virtue of their positions with the federal government: John
W. Snow, Secretary of the Treasury and Managing Trustee; Jo Anne
Barnhart, Commissioner of Social Security; Michael O. Leavitt, Secretary of Health and Human Services; and Elaine L. Chao, Secretary
of Labor. The two public trustees are John L. Palmer and Thomas R.
Saving.
The 2006 Trustees Report will be posted to www.socialsecurity.gov/OACT/TR/TR06/ by Monday afternoon.
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information and statistics,
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SSA Press Office 440 Altmeyer Building 6401 Security Blvd. Baltimore, MD 21235
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