by D. Cupples | The annual Social Security trustees' report was released yesterday. Based on the intermediate set of assumptions, the trustees concluded the following:
"Annual cost will begin to exceed tax income in 2017 for the combined OASDI Trust Funds, which are projected to become exhausted and thus unable to pay scheduled benefits in full on a timely basis in 2041 under the long-range intermediate assumptions.
"For the trust funds to remain solvent throughout the 75-year projection period, the combined payroll tax rate could be increased during the period in a manner equivalent to an immediate and permanent increase of 1.70 percentage points, benefits could be reduced during the period in a manner equivalent to an immediate and permanent reduction of 11.5 percent, general revenue transfers equivalent to $4.3 trillion in present value could be made during the period, or some combination of approaches could be adopted. Significantly larger changes would be required to maintain solvency beyond 75 years." (see full report or highlights)
Kevin Drum points out some good news: that this year's projected 75-year deficit is lower than last year's, partly because illegal immigrants' contributions to the system were not adequately accounted for last year. Memeorandum has commentary.