Due in large measure to a growing economy, reduced unemployment, and low inflation, Social Security’s long-range projections have improved over the past year, the Social Security Board of Trustees reported today in their 1998 annual report.

Although sustained high economic growth over the past year pushed back the depletion of the Social Security trust funds assets to 2032 rather than 2029 as forecast in last year’s report, the Trustees continued to urge timely action to address long-range deficits.

"These outcomes are a direct result of the enactment of the Balanced Budget Act and the recent strong performance of the economy," Treasury Secretary Robert E. Rubin said.

"Today’s report confirms that the Social Security long-term financing problem is one of manageable proportions," Kenneth S. Apfel, Commissioner of Social Security, said. "Although there is no immediate financial crisis, the time to act is now in order to prevent a crisis from ever occurring."

President Clinton has called for this year to be a year of national dialogue and has asked all Americans to get involved. In December, the President will convene a bipartisan White House Conference on Social Security and begin bipartisan negotiations with congressional leaders early next year.

"The President believes that this year of public discussion is essential to shaping a Social Security program for the future that provides a foundation of protection for all Americans and inspires public confidence," Apfel said.

The Trustees reported that income from payroll taxes will become insufficient to meet all Social Security obligations in 2013, a year later than forecast in last year’s report. At that time it will be necessary to begin using interest income to the trust funds. Beginning in 2021, it will be necessary to redeem trust fund assets to pay benefits until 2032 when the trust fund reserves will be exhausted and income going into the trust funds will provide money to pay only three-fourths of benefits. Over the 75-year long-range forecast, the Trustees predicted the shortfall to be 2.19 percent of taxable payroll rather than 2.23 percent as estimated last year.

"The health of both the Social Security and Medicare trust funds is important for the millions of Americans who depend on these programs today, and for the millions who will depend on them in the future," Secretary Rubin said. "Preserving and modernizing Social Security and Medicare is not a partisan issue. We will be able to construct acceptable solutions to the longer-term challenges of both programs only if we join together and act on a bipartisan basis."

Required by law to report annually to Congress on the current and future financial condition of the trust funds, the Trustees also update economic and demographic assumptions reflecting recent experience of the past year and analysis of past trends. Based on their findings, the Trustees reported the following:

• About 147 million workers in 1997 worked in jobs covered by the Social Security program and 44 million people were receiving benefits each month.
• Income to the combined Old Age, Survivors, and Disability Insurance trust funds totaled $457.7 billion and outgo totaled $369.1 billion.
• Trust fund reserves amounted to $656 billion at the end of 1997, and interest income amounted to $43.8 billion in 1997, representing an effective annual interest rate of 7.5 percent.
• Administrative expenses totaled $3.4 billion, or about 0.9 percent of benefit payments.

The Board of Trustees is composed of six members: the Secretary of the Treasury, who serves as the managing trustee; the Secretary of Labor, the Secretary of Health and Human Services, and the Commissioner of Social Security. Two other members, Stephen G. Kellison and Marilyn Moon, who were appointed by the President and confirmed by the Senate, are serving four-year terms as public members.

Note: copies of most SSA press releases, as well as other Social Security information and statistics, are available at SSA’s Internet site, Social Security Online, at http://www.ssa.gov