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Everything You Need to Know About the 2011 Social Security Trustees’ Report

The Social Security trust fund will be in surplus again in 2011, and will be able to fund scheduled benefits until 2036, according the 2011 Social Security Trustees’ report, which was released today.

The Strengthen Social Security Campaign, a coalition of progressive groups opposed to cuts in Social Security benefits, issued a statement noting that Social Security remained in surplus. (Full disclosure: I work for the Strengthen Social Security Campaign.)

“The trustees’ report found that Social Security’s surplus will be $69.3 billion in 2011.  Those who say that Social Security is in deficit this year are flat wrong,” said Nancy Altman, Co-Chair of the Strengthen Social Security Campaign. “By law, Social Security cannot deficit-spend and cannot borrow, so it is obvious that Social Security cannot add a penny to the federal deficit.”

“The trustees’ report states that Social Security will be able to pay all benefits for the next quarter century, even withoutcongressional action. Bottom line, Social Security works,” said Eric Kingson, Co-Chair of the Strengthen Social Security Campaign. “Even in a bad economy, Americans continue to receive the full benefits they have earned for themselves and their families. The trustees report makes clear there is no reason to cut benefits—not for today’s seniors; not for any generation.”

Social Security is projected to post an annual surplus of $69.3 billion in 2011, which will bring the total trust fund surplus to $2.7 trillion. The trust fund is projected to grow for the next 11 years, peaking at $3.7 trillion in 2022, at which point it will begin drawing down its reserves. In 2036, the trust fund will be exhausted, but Social Security will still be able to pay 77 percent of scheduled benefits through 2084.

The date of the trust fund’s exhaustion moved up one year from last year’s projection of 2037. Despite the non-news of the report, the mainstream media responded to the Trustees’ report release with typical alarmism, focusing only on the fact that the projected shortfall moved up a year to 2036.

The Associated Press headline was “Trustees say Medicare, Social Security finances have worsened; Medicare to be broke by 2024.” Not only did it conflate Social Security with Medicare which actually is in trouble, it wrongly attributed the causes of the slight deterioration in Social Security’s finances to the slowing economy.

In fact, it was largely the result of higher projected life expectancy at age 65. (For more on that, see this CEPR report.)



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Daniel Marans

Daniel Marans