SOCIAL SECURITY

News Release

Social Security Board of Trustees: Long-Range Financing Outlook Remains Unchanged

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The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds and the long-range outlook remains unchanged.  The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2037, the same as projected last year.  The Trustees also project that program costs will exceed tax revenues in 2010 and 2011, be less than tax revenues in 2012 through 2014, and then permanently exceed tax revenues beginning 2015, one year earlier than estimated in last year’s report.  The worsening of the short-range outlook for the Social Security Trust Funds is due in large part to the recent economic downturn. 

In the 2010 Annual Report to Congress, the Trustees announced:

• The projected point at which the combined Trust Funds will be exhausted comes in 2037 – the same as the estimate in last year’s report. At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits.

• The projected point at which tax revenues will fall below program costs comes in 2010.  Tax revenues will again exceed program costs in 2012 through 2014 before permanently falling below program costs in 2015 -- one year sooner than the estimate in last year’s report.

• The projected actuarial deficit over the 75-year long-range period is 1.92 percent of taxable payroll -- 0.08 percentage point smaller than in last year’s report.

• Over the 75-year period, the Trust Funds would require additional revenue equivalent to $5.4 trillion in present value dollars to pay all scheduled benefits.

“The impact of the current economic downturn continues to be felt by the Social Security Trust Funds,” said Michael J. Astrue, Commissioner of Social Security.  “The fact that the costs for the program will likely exceed tax revenue this year is not a cause for panic but it does send a strong message that it’s time for us to make the tough choices that we know we need to make.  I applaud President Obama for his creation of the Deficit Commission so we can start the national discussion needed to ensure that Social Security remains a foundation of economic security for our children and grandchildren.”

Other highlights of the Trustees Report include:

• Income including interest to the combined OASDI Trust Funds amounted to $807 billion ($667 billion in net contributions, $22 billion from taxation of benefits and $118 billion in interest) in 2009.

• Total expenditures from the combined OASDI Trust Funds amounted to $686 billion in 2009.

• The assets of the combined OASDI Trust Funds increased by about $122 billion in 2009 to a total of $2.5 trillion.

• During 2009, an estimated 156 million people had earnings covered by Social Security and paid payroll taxes.

• Social Security paid benefits of $675 billion in calendar year 2009.  There were about 53 million beneficiaries at the end of the calendar year. 

• The cost of $6.2 billion to administer the program in 2009 was a very low 0.9 percent of total expenditures.

• The combined Trust Fund assets earned interest at an effective annual rate of 4.9 percent in 2009.

The Board of Trustees is comprised of six members.  Four serve by virtue of their positions with the federal government: Timothy F. Geithner, Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Kathleen Sebelius, Secretary of Health and Human Services; and Hilda L. Solis, Secretary of Labor.  The two public trustee positions are currently vacant.  President Obama nominated two individuals to serve as public trustees, and the Senate Finance Committee held hearings on July 29 for both trustee nominees.  Their confirmations are pending.

The 2010 Trustees Report will be posted at www.socialsecurity.gov/OACT/TR/2010/ by Thursday afternoon.

Share your personal stories and reflections

On August 14, Social Security will mark its 75th anniversary. Since 1935, Social Security has touched the lives of almost every American and provided an economic lifeline for millions of people.

To help us celebrate, please share your Social Security story. How has Social Security made a difference in your life and the lives of your family and friends? For example, tell us how:

• it felt to receive your first retirement payment;
• survivors or disability benefits helped you;
• a Social Security employee went above and beyond to give great service; or
• working at Social Security has been a rewarding experience.

You can share your experience or reflection about Social Security by visiting www.socialsecurity.gov/75thanniversary/stories.html.

You also can submit a video as part of a new contest – How Social Security Has Made a Difference in My Life. This contest runs through August 27th. Entries must be submitted on YouTube, must be between 30 and 90 seconds in length, and must be accompanied by a completed contest entry form and contact information. Information about the video contest, including the entry form and judging criteria, can be found at www.ssa.gov/open/contest/index.html. The winning video will be featured on socialsecurity.gov, Social Security’s YouTube channel, Facebook, and Twitter feeds.

SOCIAL SECURITY

News Release

Social Security Proposes Legislation to End Furloughs
of Federally Paid State Disability Workers

Michael J. Astrue, Commissioner of Social Security, today announced that the agency is submitting legislation to Congress that would prohibit states, without the Commissioner’s prior authorization, from reducing the number of state personnel who make disability determinations for Social Security or the hours they work below the amount the agency authorizes.

“It is long past time that states end these unconscionable furloughs and hiring freezes that needlessly harm citizens with disabilities,” Commissioner Astrue said.  “States realize no fiscal savings whatsoever from these actions and this legislation would prevent needless delays in the disability determination process.  I am grateful for the President’s support and urge Congress to move quickly to help us make this provision the law of the land.”

More than a dozen states have implemented furloughs and hiring freezes that affect the federally paid state workers who make disability determinations for Social Security.  The state agencies that employ these workers in their disability determination service (DDS) components receive 100 percent of their funding from the Federal government. Accordingly, states do not save any money by imposing furloughs and hiring freezes on federally funded employees.  Rather, they slow benefits to some of the most vulnerable citizens – for example, furloughs in California in fiscal year 2010 delayed payment of over $11 million in benefits to more than 40,000 citizens with disabilities.  State-imposed furloughs and hiring freezes also reduce state income tax revenue and increase unemployment in the state.

“The members of Local 1000 have always believed that furloughing federally funded positions doesn’t make economic sense and that has been proven in California during these past 18 months that Governor Schwarzenegger has imposed furloughs on state employees,” Yvonne Walker, President of Service Employees International Union Local 1000 said.   “I applaud Social Security for initiating legislation that would prevent further bad economic policy from going forward.  This provision will not only help DDS workers, but the claimants who rely on the services our members provide.”

“We commend the Commissioner for his forceful and dedicated leadership in taking this bold action,” said Susan X. Smith, President of the National Association of Disability Examiners (NADE).  “Our members are witness to the impact the current economic recession has had for disabled citizens and we are working hard to meet the dramatic increase in claims for benefits.  These furloughs further compound the problems faced by disabled citizens by creating unnecessary delays in the processing of their claims.  NADE urges quick action with regards to this legislative proposal.”