Academic journal article Social Security Bulletin

Social Security in Review

Academic journal article Social Security Bulletin

Social Security in Review

Article excerpt

1996 Trustees' Report

On June 5, 1996, the Social Security Board of Trustees released its annual report, which projects that the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds are in good financial shape and will remain in good standing well into the next century. It is forecasted that both the OASI and the DI Trust Funds will be able to meet all benefit obligations through 2029. In contrast to the perception of a great many persons, Social Security in 2029 will not be "broke." Annual tax revenues will be sufficient to cover 77 percent of annual expenditures.

In calendar year (CY) 1996, income to the OASDI Trust Funds will total approximately $425 billion, and outgo will total about $355 billion. Trust fund reserves-$496 billion at the end of 1995-will, therefore, experience an upward surge to nearly $566 billion by the end of CY 1996. The reserves, in 1995, earned more than $32 billion in interest, at an effective annual rate of 7.8 percent. In 1996, approximately 142 million working individuals will be covered under the Social Security programs and more than 43 million individuals will receive monthly retirement, disability, or survivor benefit payments.

In addition to the OASDI projections presented in the report, the Trustees also forecast the financial status of the Medicare Trust Fund. It is projected that the Federal Health Insurance (HI) Trust Fund could possibly be exhausted within 5 years without the enactment and implementation of legislation that addresses issues directly associated with its financial imbalance. It should be noted that even if the trust funds were exhausted, payroll taxes would cover the cost of a portion of benefit obligations. …

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