June 4, 2013
Contrary to claims by cheerful news sources, Social Security’s deficit outlook is not “unchanged” or “no worse.” Social Security’s unfunded obligation rose by $1 trillion according to the latest trustees’ report.
U.S. taxpayers now owe $12.3 trillion to pay scheduled benefits—in addition to what Social Security can hope to collect from payroll taxes—over the 75-year horizon. That’s $98,517 for every household in America today.
But who can blame news sources for merely citing Treasury Secretary Jack Lew, who summarized the report in this bright light:
The projections in this year’s report for Social Security are essentially unchanged from last year.
The reported unfunded obligation for the combined Social Security old age, survivors, and disability insurance (OASDI) program rose from $8.6 trillion in 2011 to $9.6 trillion in 2012. The $1 trillion increase represents a 12 percent deterioration in OASDI’s funding outlook.
“Essentially unchanged,” huh?
But even this figure excludes $2.7 trillion in IOUs owed to the Social Security trust fund, and adding it in brings the total unfunded obligation to $12.3 trillion. The entire debt held by the public is $11.9 trillion—a $1 trillion in increase in the debt limit would be no big deal then either, would it?
Continue reading at Social Security’s Unfunded Obligation Rises by $1 Trillion.