Tuesday, December 29, 2015

CBO Releases New Social Security Financing Projections

The Congressional Budget Office has released updated projections for Social Security’s long-term funding health. The agency projects that Social Security faces a 75-year actuarial deficit of 4.37 percent of taxable payroll, a substantially larger shortfall than the 2.68 percent deficit projected by Social Security’s Trustees.

The main reasons for the differences between CBO and the Trustees appear to be CBO assuming a more rapid increase in life expectancies, higher disability claiming, and greater earnings inequality.

The CBO projects that the combined Social Security Trust Funds will become insolvent in 2030, with an 80 percent confidence range of between 2026 and 2033. In 99 percent of simulations, the CBO model projected insolvency by 2040.

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