CBO – Social Security in even worse shape than predicted
posted at 9:00 pm on March 13, 2012 by Steve Eggleston
Allahpundit already hit on the Congressional Budget Office takedown of PlaceboCare as part of its March review of the budget. Allow me to pile on with the bad news on Social Security. The CBO took a look at the projected operations of the “trust funds” over the next 10 fiscal years:
A couple of things jumped out at me:
- The primary (i.e. non-interest) deficits of each half of Social Security will only continue to grow from this past fiscal year, even without counting the effects of the mostly-unfunded payroll tax holiday.
- The Disability Insurance part of Social Security will no longer be able to pay out the entirety of its scheduled benefits before the end of the next Presidential term.
Assuming the DI benefits continue to somehow be paid out after the beginning of 2016, the federal government will need to come up with $1.22
billion trillion beyond the payroll tax and taxes on Social Security benefits between this past October and September 2022 to meet the obligations.
Why it’s worse than predicted
Back in 2011, the Social Security Trustees predicted that the OASI portion would have a small primary surplus between calendar years 2012 and 2015, and that the DI portion would not be exhausted until 2018. While the Trustees deal with only calendar years, as part of a re-estimation of an earlier Trustees’ report (specifically, 2009, the last one before the Trustees began to claim that PlaceboCare would strengthen Social Security), I was able to rough out a month-by-month estimation of the Trustees’ reports, which allows for a (more-or-less) direct comparison between that and the CBO.
I kept on updating and adjusting the 2009 Trustees’ Report for what has happened through the Obama administration thus far (through January with numbers from the SSA and February with estimates from the Monthly Treasury Statement), and it has proven to be a leading indicator of the downfall of Social Security. Little did I know that even I would be trumped, at least short-term, by the CBO.
I would be remiss if I didn’t note that the last quarter of 2011, or if you prefer, the first quarter of FY2012, came in better than the close of the fiscal year would suggest. The calendar-year 2011 primary deficits were $34 billion for the DI “Trust Fund” and $11 billion for the OASI “Trust Fund”. Indeed, January saw the 12-month OASI primary deficit drop to just under $10 billion ($9.8 billion). However, February rather unexpectedly ended that trend, as the preliminary 12-month OASI primary deficit rose to $10.4 billion.
Revisions/extensions – Corrected a typo found by Zumkopf