August 6th, 2011
Econintersect: Congressional Budget Office (CBO) in its annual update to its long term social security projections shows the Disability Insurance (DI) trust fund will be exhausted in 2017 and that the Old Age and Survivors Insurance (OASI) trust fund will be exhausted in 2040. Disability Insurance is 19% of social security program expenditures.
Once a trust fund’s balance has fallen to zero and current revenues are insufficient to cover the benefits that are specified in law, the corresponding program will be unable to pay full benefits without changes in law.
Follow up:The CBO noted:
In calendar year 2010, for the first time since the enactment of the Social Security Amendments of 1983, annual outlays for the program exceeded annual revenues excluding interest credited to the trust funds. CBO projects that the gap will continue: Over the next five years, outlays will be about 5 percent greater than such revenues. However, as more members of the baby-boom generation (that is, people born between 1946 and 1964) enter retirement, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the shortfall will begin to grow around 2017.