Congressional Budget Office officials have tried once again to suggest that the United States should adjust Social Security to increase the odds that the program will deliver the promised benefits.
In 2010, for the first time since 1983, Social Security outlays will exceed program tax revenue, CBO officials write in a summary of an analysis of Social Security policy options.
If the economy continues to recover, but current rules stay in place, revenue might exceed outlays for a few years. Starting in 2016, “the program’s annual spending will regularly exceed its tax revenues,” officials say.
Unless changes are made, the Social Security retirement and disability trust funds “will be exhausted in 2039,” officials say. “At that point, the resources available to the Social Security program will be insufficient to pay full benefits as they are currently structured.”
If Congress lets the current rules stand, the Social Security program would have to cut benefits 20% to match outlays with revenue, officials estimate.
Congress could bring the program into balance over a 75-year period by immediately increasing payroll taxes by about 0.6% of gross domestic product, or $90 billion, officials estimate.
“Or scheduled benefits would have to be reduced by an equivalent amount, or some combination of those changes and others would have to be implemented,” officials say.