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Congressional Research Service
Informing the legislative debate since 1914
S
July 1, 2019
Social Security: Select Findings of the 2019 Annual Report
Social Security is a self-financing program that covers
approximately 177 million workers and provides monthly
cash benefits to 63 million beneficiaries. Social Security is
the federal government's single largest program, both in
terms of the number of people affected (i.e., covered
workers and beneficiaries) and its finances. The Social
Security program is composed of Old-Age and Survivors
Insurance (OASI) and Disability Insurance (DI); it is
referred to collectively as OASDI.
The OASDI program is primarily financed through a
payroll tax applied to Social Security covered earnings up
to an annual limit (88.2% of total revenues in 2018). In
addition, some beneficiaries pay income tax on a portion of
their Social Security benefits (3.5% of total revenue in
2018). From 1983 to 2010, the OASDI program collected
more in tax revenues than needed to pay benefits. These
excess revenues were held in interest-bearing U.S. Treasury
securities, providing a third source of funding for the
program. In 2018, interest revenues accounted for 8.3% of
total revenues. Monthly benefits are the largest OASDI
program cost, accounting for 98.8% of total costs in 2018.
Administrative and other costs accounted for the remainder.
The Trust Funds
Both the OASI and DI programs operate with 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 the
OASI and DI 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.
The Board of Trustees manage 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' status is indicated by their solvency-the ability to
pay full benefits scheduled under current law on a timely
basis. If assets held in the trust funds were to be depleted,
the OASDI program could only pay out in benefits what it
receives in revenues. Table 1 shows the trust funds' key
dates under the trustee's intermediate assumptions, which
reflect their best estimate of future economic, demographic,
and program-specific factors. As shown, some dates such as
for costs exceeding noninterest revenues, have already
passed.
Table I. Key Dates Projected for the Social Security
Trust Funds in the 2018 and 2019 Trustees Reports
(under the intermediate assumptions)
2018 Report 2019 Report
OASI DI OASDI OASI DI OASDI
Cost exceeds
noninterest 2010 2019 2010 2010 2036 2010
revenues
Cost exceeds
total 2018 2019 2018 2020 2041 2020
revenues
Trust fund
reserves 2034 2032 2034 2034 2052 2035
depleted
Source: CRS, based on the 2018 and 2019 OASDI Trustees Report.
In 2018 and 2019, the projected date of OASI Trust Fund
reserve depletion is unchanged. However, the trustees now
project the DI Trust Fund reserve depletion to occur in
2052, a noticeable change from 2032 in last year's report.
The trustees attribute this change to lower-than-anticipated
disability applications and benefit awards. As stated in the
2019 annual report, Steady declines in applications since
2010, and the resulting lower levels of disability
beneficiaries, have caused the annual cost of the DI
program to become much closer to annual revenues,
making the DI Trust Fund reserve depletion date very
sensitive to small changes in income [revenue] and cost.
This development is a major reason the combined OASDI
Trust Funds' reserve depletion date changed to 2035 in this
year's report as opposed to 2034 in last year's report.
In last year's report, the trustees projected the trust funds'
overall balance (i.e., the total amount of accumulated asset
reserves) would decrease. However, asset reserves held in
the trust funds increased during 2018, owing to larger-than-
projected revenues and lower-than-projected costs. Table 2
displays the projected and actual financial operations for the
combined OASDI Trust Funds.
Table 2. Financial Operations for the Social Security
Trust Funds in the 2018 and 2019 Trustees Reports
(in billions; projections under the intermediate assumptions)
2018 2018 2019
(projected) (actual) (projected)
Starting Trust Funds' $2,891.7 $2,891.7 $2,894.9
Reserves
Total Revenue 1,001.1 1,003.4 1,061.0
Total Costs 1,002.8 1,000.2 1,060.0
Change in Trust Funds' -1.7 3.1 1.0
Reserves
Ending Trust Funds' 2,890.1 2,894.9 2,895.9
Reserves
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