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Social Security's Financial Outlook: The 2010 Update in Perspective

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Publication Date: September 2010

Publisher(s): Center for Retirement Research at Boston College

Author(s): Alicia H. Munnell

Series:

Special Collection:

Topic: Economics (Economic policy, planning, and development)

Keywords: Social Security

Type: Report

Coverage: United States

Abstract:

After being held up for four months while estimates were modified to reflect the expected effects of the Affordable Care Act (ACA), the 2010 Trustees Report for the Social Security system finally emerged in early August. The report contains no surprises, which may explain the relative lack of attention it has received in the press. But the fact that the future of Social Security has been relatively untouched by the market collapse and ensuing recession is itself newsworthy. Despite reduced revenues and increased benefit claims in the short run, the system continues to face a 75-year deficit equal to about 2 percent of taxable payroll.

This brief puts the current report in perspective and discusses a few interesting wrinkles, such as the outlook for a cost-of-living adjustment in 2011 and the implications of a decline in the Average Wage Index. Unfortunately, for the third year in a row, the Social Security Trustees Report has not been signed by any public trustees. The absence of these independent voices from the valuation process reflects a persistent failure of the political process, but not of the program itself.