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1 1 (April 5, 2023)

handle is hein.crs/govelem0001 and id is 1 raw text is: Congressional Research Servi Informing the IegisIative debate sinco 1914 0 April 5, 2023 Social Security: Selected Findings of the 2023 Annual Report According to the 2023 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 2023 relative to what they were in 2022. 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 80% (the same as in the 2022 report). Social Security Overiew Social Security is a self-financing program that in 2023 covers approximately 183 million workers and provides monthly cash benefits to over 66 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 (90.6% of total revenues in 2022) 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 (4.0% of total revenue in 2022). 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 (5.4% of total revenues in 2022). Monthly benefits are the largest OASDI program cost (99.0% of total costs in 2022). 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' annual reports to Congress on the trust funds' status and financial operations include short-range (10-year) and long- range (75-year) projections. 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 2022 and 2023 Trustees Reports (Under the Trustees' Intermediate Assumptions) 2022 Report 2023 Report OASI DI OASDI OASI DI OASDI Cost exceedstax 2010 2044 2010 2010 2044 2010 revenues ost exceeds 2021 2090 2021 2021 >2097 2021 total revenues Trustfund reserves 2034 >2096 2035 2033 >2097 2034 depleted Source: CRS, based on the 2022 and 2023 OASDI trustees report. In the 2023 report, the trustees project a date of 2033 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 continued to have low levels of disability applications and benefit awards for 2022. Disability applications have declined substantially since 2010, and the total number of disabled-worker beneficiaries in current payment status has been falling since 2014. Prior to the 2023 report, the 2022 report was the first since 1983 in which the DI trust fund was not projected to become depleted inside the 75-year projection period. In the previous year's (2022) 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 2022 owing to larger-than- projected revenues relative to larger-than-projected costs. Table 2. Financial Operations for the Social Security Trust Funds in the 2022 and 2023 Trustees Reports (In Billions; Under the Trustees' Intermediate Assumptions) 2022 2022 2023 (projected) (actual) (projected) Starting trust funds' arerus $2,852.0 $2,852.0 $2,829.9 _ _ _reserves Total revenue 1,195.8 1,221.8 1,334.7 _ Total costs _ 1,242.7 1,243.9 1,387.9 Change in trust funds' -46.8 -22.1 -53.2 reserves Ending trust funds' 2,805.2 2,829.9 2,776.7 reserves Source: CRS, based on the 2022 and 2023 OASDI trustees report.

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