WASHINGTON -- The Concord Coalition emphasized today that estimates the Social Security trust funds will be solvent until 2034 are irrelevant from an economic standpoint. In fact, the Social Security Trustees' report released today indicates that the long-term financial problems facing the program remain virtually unchanged from last year.
"Two more years of trust fund solvency does not mean it will be any easier for future taxpayers to afford the projected cost of the program. Today's report of the Social Security Trustees provides no reason to delay necessary reform efforts," said Concord Coalition Policy Director Robert Bixby. "Despite some of the optimistic rhetoric, we are basically treading water."
According to the Social Security Trustees, the program will begin running cash deficits in 2014 -- one year later than the last year's projection of 2013. The new projections show that Social Security's annual cash deficit will rise from $35 billion in 2015 to $904 billion in 2035 -- long-term projections nearly identical to those made by the Trustees in their 1998 report. All of the structural and demographic problems that have been discussed by experts, politicians, and citizens remain in place and still must be addressed.
|SOCIAL SECURITY ANNUAL DEFICIT PROJECTIONS
(in billions of dollars)
|1999 projection in billions of dollars||- 35||- 200||- 420||- 666||- 904||- 1,116|
|1999 projection in inflation-adjusted 1999 dollars||- 22||- 105||- 188||- 253||- 292||- 306|
|1998 projection in billions of dollars||- 49||- 214||- 433||- 684||- 925||- 1,147|
|1998 projection in inflation-adjusted 1999 dollars||- 29||- 107||- 183||- 243||- 276||- 289|
"The Social Security Trustees, the Office of Management and Budget, and the Congressional Budget Office all agree that the IOUs in the trust fund do nothing to improve the Treasury's ability to actually pay benefits once the system begins running a cash deficit," said Bixby. "At that point, Social Security's obligations can only be met through tax increases, benefit cuts, or more borrowing from the public -- exactly the same ways those obligations would be met if the trust fund didn't exist."
Concord also expressed caution about the news that the Medicare Hospital Insurance Trust Fund will remain solvent until 2015. "While the Trustees reported real improvement in Medicare's finances, it is not yet clear whether the sudden drop in Medicare inflation is an aberration or a permanent improvement," said Bixby. "The bottom line is that the program remains unsustainable in its current form."