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1 1 (June 14, 2022)

handle is hein.crs/govegij0001 and id is 1 raw text is: Congressional Research Servi Infrmring the legislitive debate since 1914 June 14, 2022 Social Security: Selected Findings of the 2022 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 better, position in 2022 relative to what they were in 2021. This relative improvement is largely attributed to a stronger-than- expected recovery from the recession experienced in 2020. Under intermediate assumptions, the projected combined trust fund asset depletion date is 2035 (versus 2034 in last year's report), after which the percentage of benefits payable would be 80% (versus 78% in 2021). Social Security Overview Social Security is a self-financing program that in 2022 covers approximately 178 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 (90.1% of total revenues in 2021) through a payroll tax applied to Social Security-covered earnings up to an annual limit. Some beneficiaries pay income tax on a portion of their Social Security benefits (3.5% of total revenue in 2021). 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 (6.4% of total revenues in 2021). Monthly benefits are the largest OASDI program cost (99.0% of total costs in 2021). 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. 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 experience. Table 1. Key Dates Projected for the Social Security Trust Funds in the 2021 and 2022 Trustees Reports (Under the Trustees' Intermediate Assumptions) 2021 Report 2022 Report OASI DI OASDI OASI DI OASDI Cost exceeds noninterest 2010 2040 2010 2010 2044 2010 revenues Cost exceeds total 2021 2045 2021 2021 2090 2021 revenues Trust fund reserves 2033 2057 2034 2034 >2096 2035 depleted Source: CRS, based on the 2021 and 2022 OASDI trustees report. In the 2022 report, the trustees project a date of 2034 for OASI trust fund reserve depletion. The DI trust fund is not projected to become depleted in the 75-year projection period. As stated, The DI program continues to have low levels of disability applications and benefit awards for 2021. Disability applications have declined substantially since 2010, and the total number of disabled-worker beneficiaries in current payment status has been falling since 2014. The 2020 report marks the first instance since the 1983 report that the DI trust fund is not projected to become depleted inside the 75-year projection period. In the previous year's (2021) 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 decrease. Asset reserves held in the trust funds decreased less than expected during 2021 owing to larger-than- projected revenues and lower-than-projected costs. Table 2. Financial Operations for the Social Security Trust Funds in the 2021 and 2022 Trustees Reports (In Billions; Under the Trustees' Intermediate Assumptions) 2021 2021 2022 (projected) (actual) (projected) Starting trust funds' art erus $2,908.3 $2,908.3 $2,852.0 reserves ------------ --- - - --------------------------- - ------------- - --------- Total revenue 1,073.8 1,088.3 1,195.8 Total costs 1,151.0 1,144.6 1,242.7 Change in trust funds' -77.3 -56.3 -46.8 reserves Ending trust funds' 2,831.0 2,852.0 2,805.2 reserves Source: CRS, based on the 2021 and 2022 OASDI trustees report.

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