Social Security’s Financial Outlook: The 2019 Update in Perspective

Contrary to media reports, the 2019 Trustees Report contains no real news. The program continues to run a 75-year deficit between 2 and 3 percent of taxable payrolls, and the trust fund will be exhausted in the early 2030s, after which the program can pay only about three quarters of benefits. If anything, the 2019 report shows a slight improvement in the program’s 75-year finances: the deficit is projected at 2.78 percent of taxable payrolls in 2019 compared to 2.84 percent in 2018. Similarly, the trust fund is scheduled to run out of money one year later – 2035 rather than 2034, as reported last year. The improvement, after accounting for various offsetting changes, is almost entirely due to a more favorable outlook for the Disability Insurance (DI) program. On the administrative side, the timing of the Trustees Report has returned to April, after several years of June or July releases. A more noteworthy issue is that this report once again reflects the continuing absence of public trustees. These slots should be filled. Public trustees play an important role in overseeing the program and communicating its status to the public. Their continued absence reflects a failure with the political process, not with the program itself. This brief updates the numbers for 2019 and puts the current report in perspective. It also briefly discusses recent developments on the disability front. The bottom line is that Social Security’s finances remain steady. Social Security’s shortfall over the next 75 years, which has been evident for the last three decades, should be addressed sooner rather than later in order to share the burden more equitably across cohorts, restore confidence in the nation’s major retirement program, and give people time to adjust to needed changes.