(CNSNews.com) – The Old-Age, Survivors, and Disability Insurance (OASDI) program commonly known as Social Security, which celebrated its 80th birthday on August 14, is projected to run an $84 billion deficit this year, according to the 2015 Annual Report of the Board of Trustees.
“Social Security’s cost exceeded its tax income in 2014, and also exceeded its non-interest income, as it has since 2010,” the trustees’ 75th annual report to Congress stated.
“This relationship is projected to continue throughout the short-range period (2015 through 2024) and beyond….For 2015, the deficit of tax income (and non-interest income) is projected to be approximately $84 billion,” the report stated.
During 2014, $646.2 billion in payroll taxes was collected from 166 million working Americans.
But that was not enough to cover the $859 billion in Social Security benefits that were collected by 59 million people, including 42 million retired workers and their dependents, six million survivors of deceased workers, and 11 million disabled workers and their dependents.
According to the trustees, “asset reserves of the OASI Trust Fund, together with continuing program income, will be adequate to cover program costs over the next 10 years.”
But they warned that “OASI Trust Fund reserves become depleted in 2035” because the number of retired Americans will increase must faster than the number of workers “as subsequent lower-birth-rate generations replace the baby-boom generation at working ages.”
However, the legally separate Disabled Insurance (DI) Trust Fund will be depleted by the end of 2016. After that, “continuing income would be sufficient to pay 81 percent of scheduled DI benefits.”
“Legislative action is needed as soon as possible to address the DI program’s financial imbalance” and to achieve “long-range financial stability, although there are fewer reform option available now than there were in the 1990s, when the projected date of reserve depletion was more distant.”
The report also stated that the Social Security system’s “unfunded obligation through the infinite horizon” is now $25.8 trillion, up from $24.9 trillion in 2014.
That amount is the difference between all future projected benefits and sources of income, Boston University Economics Professor Laurence Kotlikoff explained in a recent Forbes oped. “It means that the system is 32 percent underfinanced."
“If we don’t raise the system’s tax rate to 16.4 percent [from the current 12.4 percent] starting today and leave it at 16.4 percent forever, our kids will face even larger permanent tax hikes when they are ultimately enacted.”