The Report

2006 Trustees Report Main Page

Highlights from this year's report include:

• As in last year's projections, Social Security's costs will exceed its revenues starting in 2017, at which point it will begin drawing on the trust funds.
• In 2040, the trust funds will be exhausted, and Social Security will be spending more than it receives in taxes. Last year, trust fund exhaustion was projected to take place in 2041.
• If current law is not changed in the next 34 years, Social Security will only be able to pay around 74 percent of currently promised benefits beginning in 2040. By 2080, tax revenues would cover 70 percent of projected benefits.
• The long-range actuarial deficit (as a percent of taxable payroll) is now 2.02 percent, up from 1.92 percent in last year's report.
• This projected financing shortfall could be immediately closed by increasing total payroll taxes by 2.02 percentage points. Currently, employers and employees each contribute 6.2 percentage points up to the payroll cap.
• Alternatively, the long range deficit could be closed by immediately reducing benefits by 13 percent.

Key Figures

• 2005 vs. 2006 Trustees Report Projections
• Projected Trust Fund Ratios Under Three Alternative Assumptions
• OASDI Cost vs. Revenue Projections

Key Tables

• Reasons for Changes in the Long-term Balance, 2006
• Workers vs. Beneficiaries 2006 | 2005
• Major Assumptions 2006 | 2005
• Economic Assumptions 2006 | 2005
• Demographic Assumptions 2006 | 2005
• Projected Trust Fund Balances as a Percent of GDP 2006 | 2005

Analysis

• Social Security's Financial Outlook: The 2006 Update in Perspective
  Center for Retirement Research | May 3, 2006
  Includes a useful breakdown of factors contributing to the deterioration of projections since 1983.
  
• Annual Bell Has Privatizers Salivating
  The Century Foundation | May 1, 2006
  No matter how much the opponents might wail and wring their hands over the future burden of Social Security, that burden does not add up to much. By Bernard Wasow.
  
• Trustees Continue to Assume Slowing Immigration, Weak Productivity
  Center for Economic and Policy Research | May 1, 2006
  Dean Baker argues that the trustees understate two factors with critical influence on Social Security's long-term solvency: productivity growth and immigration rates.
  
• Social Security Finances: Findings of the 2006 Trustees Report
  National Academy of Social Insurance | May 1, 2006
  
• What The New Trustees’ Report Shows About Social Security
  Center on Budget and Policy Priorities | May 1, 2006
  Analysis of the projections and comparison of Social Security with other reasons for long-range deficits in the federal budget, specifically the 2001 and 2003 tax cuts.
  
• Reforming Social Security Sooner Rather Than Later: Fact and Fiction
  Center on Budget and Policy Priorities | April 28, 2006
  Examines what the costs of delaying reform are, and why privatization plans of the sort proposed last year would do nothing to mitigate those costs, despite proponents' frequent claims. See also the related CBPP analysis: Will The Administration Claim The Cost Of Fixing Social Security Rose $700 Billion Because Congress Did Not Act Last Year?

News Coverage

• Finances of Social Security and Medicare Deteriorate
  New York Times | May 2, 2006
• Social Security Update
  Washington Monthly | May 2, 2006
• Dana Milbank: Serving Up Social Security and Medicare, Without the Fixings
  Washington Post | May 2, 2006
• Social Security's Health Declines
  CBS/AP | May 1, 2006
• Social Security, Medicare Due for Checkup
  AP | May 1, 2006

Alternate Projections

• CBO's Outlook for Social Security and Updated Projections (PDF)
  The nonpartisan Congressional Budget Office produces its own estimates about Social Security's future, which point to an insolvency date roughly a decade later than the insolvency date reported by the Trustees. Many observers consider CBO's long range assumptions more plausible than those in the Trustees Report.