About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (October 5, 2021)

handle is hein.crs/goveepo0001 and id is 1 raw text is: Congressional Research Service ^Inforrning the legislative debate since 1914 S October 5, 2021 Social Security: Selected Findings of the 2021 Annual Report According to the recent report of the Board of Trustees of the Social Security Trust Funds, the program's finances are in a similar, albeit marginally worse, position in 2021 to what they were in 2020. Under intermediate assumptions, the projected combined Trust Fund asset depletion date is 2034 (versus 2035 in last year's report), after which the percentage of benefits payable would be 78% (versus 79% in 2020). Social Security Overview Social Security is a self-financing program that in 2021 covers approximately 176 million workers and provides monthly cash benefits to over 65 million beneficiaries. It is the federal government's largest program in terms of both the number of people affected (i.e., covered workers and beneficiaries) and its finances. Social Security is composed of Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI), referred to collectively as OASDI. The OASDI program is primarily financed (89.6% of total revenues in 2020) through a payroll tax applied to Social Security-covered earnings up to an annual limit. In addition, some beneficiaries pay income tax on a portion of their Social Security benefits, accounting for 3.6% of total revenue in 2020. From 1983 to 2009, the OASDI program collected more in tax revenues than needed to pay benefits. Excess revenues are held in interest-bearing U.S. Treasury securities, providing a third source of funding for the program. In 2020, interest revenues accounted for 6.8% of total revenues. Monthly benefits are the largest OASDI program cost, accounting for 99.0% of total costs in 2020. Administrative and other costs accounted for the remainder. The Trust Funds Both the OASI and DI programs use a trust fund financing mechanism. Monies credited to these trust funds are earmarked for paying Social Security benefits and certain administrative costs. Using a trust fund allows OASI and DI programs to track their respective programs' revenues and costs and to hold any accumulated assets from years when revenues exceed costs. The OASI Trust Fund and DI Trust Fund are legally distinct entities; they are discussed here collectively as the OASDI Trust Funds, or the trust funds. A Board of Trustees manages the trust funds. The trustees are required to report to Congress annually on the trust funds' status and financial operations. In general, the trust funds' solvency-the ability to pay full benefits scheduled under current law on a timely basis-indicates their status. If assets held in the trust funds were to be depleted, the OASDI program could pay out in benefits only what it receives in revenues. Table 1 shows the trust funds' key dates under the trustees' intermediate assumptions, which reflect their best estimate of future economic, demographic, and program-specific factors. Table 1. Key Dates Projected for the Social Security Trust Funds in the 2020 and 2021 Trustees Reports (under the trustees' intermediate assumptions) 2020 Report 2021 Report OASI DI OASDI OASI DI OASDI Cost exceeds noninterest 2010 2041 2010 2010 2040 2010 revenues - - ---------------------------------------- ----------------------------- Cost exceeds total 2021 2047 2021 2021 2045 2021 revenues ------i- ------------------------------------------ ------------------------------- Trust fund reserves 2034 2065 2035 2033 2057 2034 depleted Source: CRS, based on the 2020 and 2021 OASDI Trustees Report. In the 2021 report, the trustees project a date of 2033 for OASI Trust Fund reserve depletion and a noticeably changed date of 2057 for DI Trust Fund reserve depletion. As stated, For the third year in a row, there has been significant change in the DI reserve depletion date because the DI reserve depletion date is very sensitive to changes in program cash flows, and there is now less revenue projected in the near term for the DI program than was expected in last year's report. Nevertheless, the DI program has continued to have low levels of disability applications and benefit awards for 2020. In the previous year's (2020) report, as shown in Table 2, the trustees projected that the trust funds' overall balance (i.e., the total amount of accumulated asset reserves) would increase slightly. Asset reserves held in the trust funds increased more than expected during 2020 owing to larger- than-projected revenues and lower-than-projected costs. Table 2. Financial Operations for the Social Security Trust Funds in the 2020 and 2021 Trustees Reports (in billions; under the trustees' intermediate assumptions) 2020 2020 2021 (projected) (actual) (projected) Starting Trust Funds' $2,897.4 $2,897.4 $2,908.3 Reserves TotalRevenue 1,116.4 1,118.1 1,073.8 Total Costs 1,112.0 1,107.2 1,151.0 Change in Trust Funds' 4.4 10.9 -77.3 Reserves Ending Trust Funds' 2,901.8 2,908.3 2,831.0 Reserves Source: CRS, based on the 2020 and 2021 OASDI Trustees Report. ittps://crsreports.congress.gov

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most