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1 The Outlook for Major Federal Trust Funds: 2020 to 2030 1 (September 2, 2020)

handle is hein.congrec/cbomfd0001 and id is 1 raw text is: SEPTEMBER 20200 The Outlook for Major Federal Trust Funds: 2020 to 2030 The federal government uses several accounting mech- anisms to link earmarked receipts (that is, money designated for a specific purpose) with corresponding expenditures. One of those mechanisms is trust funds. When the receipts designated for trust funds exceed the amounts needed for expenditures, the funds are cred- ited with nonmarketable debt instruments known as Government Account Series (GAS) securities, which are issued by the Treasury. At the end of fiscal year 2019, trust funds held $5.2 trillion in such securities.2 The federal budget has numerous trust funds, although most of the money credited to them goes to fewer than a dozen. By far the largest trust funds are Social Security's Old-Age and Survivors Insurance (OASI) Trust Fund and the funds dedicated to the government's retirement programs for its military and civilian personnel (see Table 1). 1. Other mechanisms serving that purpose are special funds (such as the fund that the Department of Defense uses to finance its health care program for military retirees) and revolving funds (such as the Federal Employees' Group Life Insurance fund). 2. Debt issued in the form of GAS securities is included in a measure of federal debt called gross debt-but because it is intragovernmental in nature, it is not included in the measure called debt held by the public. For a discussion of different measures of federal debt, see Congressional Budget Office, Federal Debt: A Primer (March 2020), www.cbo.gov/publication/56165. According to the Congressional Budget Office's current baseline budget projections, the balances held by federal trust funds will fall by $43 billion in fiscal year 2020.3 That amount is $100 billion lower than the $57 billion surplus that the agency estimated in January, when it last published its baseline budget projections for the major trust funds.4 The change in CBO's estimate was largely driven by an increase in payments made by the Unemployment Trust Fund as the number of beneficia- ries increased. Spending from the trust funds is projected to exceed income by $18 billion in 2021, a deficit that grows to $502 billion by 2030 (see Table 2). Over the 3. Typically, the change in trust funds' balances in a given year equals their deficit or surplus in that year. However, the trust funds' estimated total deficit for 2020 is $76 billion, not $43 billion. The reason is that the Unemployment Trust Fund's balances are not large enough to cover its deficit this year. That fund receives repayable advances from the Treasury to make up for any shortfalls when its balance is exhausted. For more information about CBO's most recent baseline projections, see Congressional Budget Office, An Update to the Budget Outlook: 2020 to 2030 (September 2020), www.cbo.gov/ publication/565 17. 4. See Congressional Budget Office, 10-Year Trust Fund Projections (supplemental material for The Budget and Economic Outlook: 2020 to 2030, January 2020), www.cbo.gov/data/ budget-economic-data#5. Notes: Unless this report indicates otherwise, all years referred to are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers in the text and tables may not add up to totals because of rounding.

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