This section presents long-range projections of the operations of the combined Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds and of the Hospital Insurance (HI) Trust Fund, expressed as a percentage of gross domestic product (GDP). While expressing these fund operations as a percentage of taxable payroll is the most useful approach for assessing the financial status of the programs (see table
IV.B1 and section
IV.B.1), analyzing them as a percentage of GDP provides an additional perspective on these fund operations in relation to the total value of goods and services produced in the United States.
Table VI.F4 shows estimated income excluding interest, total cost, and the resulting balance of the combined OASI and DI Trust Funds, of the HI Trust Fund, and of the combined OASI, DI, and HI Trust Funds, expressed as percentages of GDP on the basis of each of the three alternative sets of assumptions. The estimated GDP on which these percentages are based is also shown in table
VI.F4. For OASDI, income excluding interest consists of payroll-tax
contributions and proceeds from
taxation of benefits. Cost consists of
benefit payments,
administrative expenses,
net transfers from the trust funds to the Railroad Retirement program, and payments for
vocational rehabilitation services for disabled beneficiaries. For HI, income excluding interest consists of payroll-tax contributions (including contributions from railroad employment) and proceeds from taxation of OASDI benefits. Cost consists of outlays (benefits and administrative expenses) for insured beneficiaries. In computing these percentages, OASDI income and cost are on a cash basis; HI income and cost are on an incurred basis.
The OASDI annual balance (income excluding interest, less cost) as a percentage of GDP is projected to be negative in 2010 under all three sets of assumptions. On the basis of the low-cost assumptions, the OASDI annual balance as a percentage of GDP is projected to be positive from 2011 through 2020. After 2020, deficits increase to a peak in 2032 and decrease thereafter. By 2052, the OASDI balance becomes positive, reaching 0.27 percent of GDP in 2084. On the basis of the intermediate assumptions the OASDI balance is projected to be positive for 2012‑14, and negative for all other years of the projection period. Annual deficits start in 2015, increase through 2036, decrease from 2037 through 2052, and increase thereafter. On the basis of the high-cost assumptions, the OASDI balance is projected to be negative throughout the projection period, with increasing deficits starting in 2013.
The HI balance as a percentage of GDP is projected to be negative from 2010‑12 under the low-cost assumptions, and then positive and generally increasing thereafter. Under the intermediate assumptions, the HI balance is projected to be negative from 2010‑14, positive from 2015‑19, and negative thereafter. Annual deficits start in 2020, increase through 2044, and decline steadily thereafter. Under the high-cost assumptions, the HI balance is negative for all years of the projection period. Annual deficits reach a peak in 2056 and decline thereafter.
The combined OASDI and HI annual balance as a percentage of GDP is projected to be negative throughout the projection period under the intermediate and high-cost assumptions. Under the low-cost assumptions, the combined OASDI and HI balance is negative from 2010‑11, positive from 2012 through 2025, negative from 2026 through 2037, then positive and steadily rising thereafter. Under the intermediate assumptions, combined OASDI and HI annual deficits decline through 2015, then rise, reaching a peak in 2038. After 2038, annual deficits fluctuate between about 1.6 percent and 1.8 percent of GDP. Combined annual deficits rise steadily after 2012 under the high-cost assumptions.
By 2084, the combined OASDI and HI annual balances as percentages of GDP are projected to range from a positive balance of 1.08 percent for the low-cost assumptions to a deficit of 6.10 percent for the high-cost assumptions. Projected balances differ by a smaller amount for the tenth year, 2019, ranging from a positive balance of 0.41 percent for the low-cost assumptions to a deficit of 1.12 percent for the high-cost assumptions.
The summarized long-range (75-year) balance as a percentage of GDP for the combined OASDI and HI programs varies among the three alternatives, by a relatively large amount (from a positive balance of 0.71 percent, based on the low-cost assumptions, to a deficit of 3.69 percent, based on the high-cost assumptions). The 25-year
summarized balance varies by a smaller amount (from a positive balance of 0.70 percent to a deficit of 1.47 percent). Summarized rates are calculated on the present-value basis including the trust fund balances on January 1, 2010, and the cost of reaching a target trust fund level equal to 100 percent of the following year’s annual cost at the end of the period. (See section
IV.B.4 for further explanation.)
