Steve at No Runny Eggs has kept a close eye on the financial statements from the Social Security administration, and he has good reason to do so.  Earlier this year, we began to see monthly deficits from SSA, a result of income drops as the recession and unemployment deepened.  However, with the Obama administration arguing that the economy has already begun its recovery, the deficits at SSA have hit their deepest ever:

The Social Security Administration’s Office of the Chief Actuary finally got around to posting the detailed November numbers for Social Security, and things have only gotten worse:

  • The combined OASDI (Old-Age Survivors and Disability Insurance) “Trust” Funds posted a $5.858 billion primary (cash, non-“interest”) deficit for November, the worst monthly performance since monthly records began in 1987.
  • The 12-month OASDI primary surplus was only $9.598 billion, also the worst 12-month performance since monthly records began.

Since there won’t be an cost-of-living increase in Social Security benefits, the combined funds may yet avoid a 12-month primary deficit in 2010 by the skin of its teeth. However, that is dependent on an improvement in the wage situation, and specifically an improvement in the job prospects of those between 62 and 67 years old. Somehow I don’t see the trend of older and higher-earning workers losing their jobs disproportionately reversing.

And the DI has begun to cannibalize its capital in order to pay off benefits:

  • For the 50th straight month, going back to October 2005, the DI Fund ran a 12-month primary deficit, this time hitting a new high of $21.399 billion.
  • Outside of the “double tax-collection” months of January and April (when it recieves both the quarterly estimated income tax payments, also received in June and September and the quarterly tax on benefits, also received in July and October), the last time the DI Fund posted a monthly primary surplus was September 2007 (which itself is a “tax-collection” month, specifically of the quarterly estimated income tax payments). One would have to go back to March 2007 to find a month outside of a “tax-collection” month with a monthly primary surplus, and all the way back to May 2003 to find a month outside both the “tax-collection” and “tax-season” months (January through April) with a monthly primary surplus.
  • A similar monthly situation with the overall DI Fund exists – outside of the “double tax-collection” months and the semi-annual interest-crediting months (June and December), the last time it posted an overall monthly surplus was September 2007; and outside of tax or interest “enhancements”, the last overall monthly surplus was posted in July 2003.
  • All that has led to the DI Fund entering a 12-month overall (which includes the effects of “interest”) deficit beginning in February 2009, which means it is redeeming more US Treasuries than it is buying. That 12-month overall deficit, which has existed since then, has now hit $10.525 billion, the first time it topped the $10 billion mark.

Recall that Peter Orszag, now Director of OMB, predicted as CBO Director in August 2008 that no one needed to worry about SSA until 2019:

Today, Social Security’s revenues each year are greater than its outlays, but as the baby-boom generation (people born between 1946 and 1964) continues to age, growth in the number of Social Security beneficiaries will accelerate, and outlays will grow substantially faster than revenues. CBO projects that outlays will first exceed revenues in 2019 and that the Social Security trust funds will be exhausted in 2049.2 If the law remains unchanged, the Social Security Administration (SSA) will then no longer have the legal authority to pay full benefits.

Orszag wasn’t even right in the month he made the prediction.  Democrats used this analysis to paint Republicans demanding Social Security reform as hysterics who wanted to attack retiree benefits and suck up to Wall Street.  Here’s the cash flow for the past two years as reported by SSA.  See for yourself who had this right (amounts in millions):

Month Total income Total outgo Net increase in assets Assets at end of month
Jan-08 $70,231.00 $50,709.00 $19,521.00 $2,258,021.00
Feb-08 $53,467.00 $50,828.00 $2,639.00 $2,260,660.00
Mar-08 $59,152.00 $51,622.00 $7,530.00 $2,268,190.00
Apr-08 $75,719.00 $51,327.00 $24,392.00 $2,292,582.00
May-08 $55,153.00 $51,893.00 $3,259.00 $2,295,842.00
Jun-08 $119,434.00 $55,735.00 $63,700.00 $2,359,541.00
Jul-08 $55,719.00 $52,033.00 $3,686.00 $2,363,227.00
Aug-08 $51,816.00 $51,934.00 ($118.00) $2,363,109.00
Sep-08 $55,316.00 $52,134.00 $3,182.00 $2,366,291.00
Oct-08 $51,767.00 $52,086.00 ($320.00) $2,365,971.00
Nov-08 $51,569.00 $51,992.00 ($423.00) $2,365,548.00
Dec-08 $105,961.00 $52,851.00 $53,110.00 $2,418,658.00
Jan-09 $71,879.00 $55,290.00 $16,589.00 $2,435,248.00
Feb-09 $54,505.00 $55,760.00 ($1,255.00) $2,433,993.00
Mar-09 $58,907.00 $56,135.00 $2,772.00 $2,436,765.00
Apr-09 $77,144.00 $56,596.00 $20,548.00 $2,457,313.00
May-09 $54,574.00 $56,330.00 ($1,755.00) $2,455,558.00
Jun-09 $120,040.00 $61,383.00 $58,657.00 $2,514,215.00
Jul-09 $56,367.00 $56,890.00 ($523.00) $2,513,692.00
Aug-09 $50,729.00 $56,490.00 ($5,761.00) $2,507,931.00
Sep-09 $53,565.00 $57,884.00 ($4,319.00) $2,503,612.00
Oct-09 $52,743.00 $57,506.00 ($4,763.00) $2,498,849.00
Nov-09 $51,562.00 $57,270.00 ($5,707.00) $2,493,141.00

And this is for DI only:

Month Total income Total outgo Net increase in assets Assets at end of month
Jan-08 $9,857.00 $8,823.00 $1,034.00 $215,918.00
Feb-08 $7,760.00 $8,830.00 ($1,070.00) $214,848.00
Mar-08 $8,589.00 $9,013.00 ($424.00) $214,424.00
Apr-08 $10,753.00 $9,095.00 $1,659.00 $216,082.00
May-08 $8,003.00 $9,011.00 ($1,007.00) $215,075.00
Jun-08 $14,475.00 $9,730.00 $4,745.00 $219,820.00
Jul-08 $7,809.00 $8,965.00 ($1,157.00) $218,663.00
Aug-08 $7,526.00 $8,814.00 ($1,288.00) $217,375.00
Sep-08 $8,036.00 $9,172.00 ($1,136.00) $216,239.00
Oct-08 $7,273.00 $9,146.00 ($1,873.00) $214,366.00
Nov-08 $7,518.00 $9,097.00 ($1,578.00) $212,788.00
Dec-08 $12,240.00 $9,256.00 $2,985.00 $215,773.00
Jan-09 $10,117.00 $9,702.00 $416.00 $216,189.00
Feb-09 $7,914.00 $9,693.00 ($1,779.00) $214,409.00
Mar-09 $8,529.00 $9,987.00 ($1,458.00) $212,951.00
Apr-09 $10,918.00 $10,202.00 $716.00 $213,667.00
May-09 $7,928.00 $10,072.00 ($2,145.00) $211,522.00
Jun-09 $14,093.00 $10,598.00 $3,495.00 $215,017.00
Jul-09 $7,876.00 $10,120.00 ($2,244.00) $212,773.00
Aug-09 $7,371.00 $9,944.00 ($2,572.00) $210,201.00
Sep-09 $7,903.00 $10,327.00 ($2,424.00) $207,777.00
Oct-09 $7,382.00 $10,341.00 ($2,958.00) $204,819.00
Nov-09 $7,546.00 $10,100.00 ($2,554.00) $202,265.00

June is also a tax collection month, which is why that number came up in the black.  Note that the September collection didn’t even create a positive blip here.

Get the picture?  Collapse is coming a lot sooner than 2049.  Maybe Barack Obama should find someone whose predictions don’t come up as consistently bad as Orszag’s to help run the budget.

Month Total income Total outgo Net increase in assets Assets at end of month
Jan-08 $70,231.00 $50,709.00 $19,521.00 $2,258,021.00
Feb-08 $53,467.00 $50,828.00 $2,639.00 $2,260,660.00
Mar-08 $59,152.00 $51,622.00 $7,530.00 $2,268,190.00
Apr-08 $75,719.00 $51,327.00 $24,392.00 $2,292,582.00
May-08 $55,153.00 $51,893.00 $3,259.00 $2,295,842.00
Jun-08 $119,434.00 $55,735.00 $63,700.00 $2,359,541.00
Jul-08 $55,719.00 $52,033.00 $3,686.00 $2,363,227.00
Aug-08 $51,816.00 $51,934.00 ($118.00) $2,363,109.00
Sep-08 $55,316.00 $52,134.00 $3,182.00 $2,366,291.00
Oct-08 $51,767.00 $52,086.00 ($320.00) $2,365,971.00
Nov-08 $51,569.00 $51,992.00 ($423.00) $2,365,548.00
Dec-08 $105,961.00 $52,851.00 $53,110.00 $2,418,658.00
Jan-09 $71,879.00 $55,290.00 $16,589.00 $2,435,248.00
Feb-09 $54,505.00 $55,760.00 ($1,255.00) $2,433,993.00
Mar-09 $58,907.00 $56,135.00 $2,772.00 $2,436,765.00
Apr-09 $77,144.00 $56,596.00 $20,548.00 $2,457,313.00
May-09 $54,574.00 $56,330.00 ($1,755.00) $2,455,558.00
Jun-09 $120,040.00 $61,383.00 $58,657.00 $2,514,215.00
Jul-09 $56,367.00 $56,890.00 ($523.00) $2,513,692.00
Aug-09 $50,729.00 $56,490.00 ($5,761.00) $2,507,931.00
Sep-09 $53,565.00 $57,884.00 ($4,319.00) $2,503,612.00
Oct-09 $52,743.00 $57,506.00 ($4,763.00) $2,498,849.00
Nov-09 $51,562.00 $57,270.00 ($5,707.00) $2,493,141.00