Trustees Issue 2002 Annual Report on the State of Social Security

by Guest Blogger, 4/1/2002

Entitlements, Spending Transparency, Revenue & Spending, Government Matters, Social Security

Last week, the Social Security Board of Trustees issued its 2002 Annual Report on the status of Social Security’s finances, in which it extended its estimates of the number of years before Social Security’s surpluses will reach certain key milemarkers.

Specifically, it extended:

By one year (from 2016 to 2017), the year by which revenue from payroll taxes of current workers will no longer be sufficient to pay for retirees’ benefits. At this point, Social Security will begin using the interest it earns each year from the government bonds it owns to make up the difference.
By two years (from 2025 to 2027), the year by which payments to beneficiaries will exceed incoming payroll tax revenue and interest payments. At this point, Social Security will begin drawing on its massive surpluses it’s been building for this very reason to continue to provide full benefits to all retirees.
By 3 years (from 2038 to 2041), the year by which Social Security’s surpluses will have been used entirely. At this point, without any changes to the current system, incoming payroll taxes will be sufficient on their own to pay for 73% of currently scheduled benefits for all retirees. (For a look at how 73% of scheduled Social Security benefits stacks up against current benefits, see the table below.)

Social Security Benefits Payable to Average Wage Earner – With No Changes to Tax or Benefits Structure
(In Current 2002 Dollars)

Year of Retirement	Scheduled Benefit	Payable Benefit	Percent of 2002 Benefit
2002	14,357	14,357	100.0
2005	14,357	14,357	106.1
2010	15,618	15,618	115.5
2015	16,406	16,406	121.3
2020	17,278	17,278	127.7
2025	18,180	18,180	134.4
2030	19,159	19,159	141.6
2035	20,218	20,218	148.8
2040	21,361	21,361	157.9
2045	22,571	16,477	121.8
2050	23,834	17,399	128.6
2055	25,135	18,348	135.6
2060	26,494	19,341	143.0
2065	27,927	20,387	150.7
2070	29,444	21,494	158.9
2075	31,049	22,666	167.6
2080	32,739	23,899	176.7

(Assumes Retirement at Normal Age)
Source: Social Security Trustees Report 2002, Table VI.E11 and author's calculations, based on chart and calculations from Social Security Trustees Report 2000 in "Social Security Myth #2184 – There Won't Be Anything Left for Me,", Dean Baker, CEPR, February 20, 2001.

This is not the first time these so-called exhaustion dates have been extended, and analysts such as the Economic Policy Institute’s Christian Weller and the Center for Economic and Policy Research’s Dean Baker and Mark Weisbrot point out that even these postponed exhaustion dates are based on extremely conservative, even pessimistic economic growth projections. For additional perspective on just how sound Social Security really is, see this related article, and a recent Center on Budget and Policy Priorities' comparison of the size of the projected Social Security shortfall and last year’s tax cut.

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