WASHINGTON, D.C. – House Ways and Means Social Security Subcommittee Chairman Sam Johnson (R-TX) announced today that the Subcommittee will hold a hearing entitled “Understanding Social Security’s Solvency Challenge” on Wednesday, September 21, at 10:00 AM in room B-318 of the Rayburn House Office Building. This hearing will focus on the differences between the estimates of Social Security’s finances produced by the Congressional Budget Office and those produced by the Social Security Trustees, as well as what these differences mean for efforts to address Social Security’s solvency.
At the hearing, Members will hear from Dr. Keith Hall, the Director of the Congressional Budget Office, and Steve Goss, the Social Security Administration’s Chief Actuary. The witnesses will discuss how their organizations arrive at their projections of Social Security’s solvency and what accounts for the differences between their projections.
Upon announcing the hearing, Chairman Johnson said:
“Everyone knows Social Security is in trouble, but how much trouble depends on who you ask. Even the numbers experts at the Congressional Budget Office and Social Security’s Trustees disagree on the size of Social Security’s shortfall. These are well-respected organizations, but they can’t both be right. I look forward to getting answers on why the CBO and the Trustees see Social Security’s future so differently. This hearing is an important step towards making sure our children and grandchildren can count on Social Security, just like today’s seniors do.”
BACKGROUND Both the Social Security Board of Trustees (Trustees) and the Congressional Budget Office (CBO) evaluate the condition of Social Security’s long-term finances annually. They base their projections on a variety of demographic and economic assumptions, including life expectancy, productivity, and interest rates.
In recent years, the Trustees’ and CBO’s estimates of Social Security’s financial status have begun to diverge. In 2016, the Trustees estimated a 75-year shortfall of 2.66 percent of taxable payroll, while CBO’s estimate was 4.7 percent. Similarly, the Trustees estimate that the combined Trust Funds will be exhausted in 2034, while CBO estimates that this will occur in 2029.
I am a Resident Scholar at the American Enterprise Institute in Washington, where my work focuses on Social Security policy. Previously I held several positions within the Social Security Administration, including Deputy Commissioner for Policy and principal Deputy Commissioner. Prior to that I was a Social Security Analyst at the Cato Institute. In 2005 I worked on Social Security reform at the White House National Economic Council, and in 2001 I was on the staff of the President's Commission to Strengthen Social Security. My Bachelor's degree is from the Queen's University of Belfast, Northern Ireland. I have Master's degrees from Cambridge University and the University of London and a Ph.D. from the London School of Economics and Political Science. I can be contacted at andrew.biggs @ aei.org.