This section presents estimated annual SSI program costs as a percentage of gross domestic product (GDP), which provides an additional perspective to assess the cost of the program relative to the size of the national economy. The estimates in this section can be viewed as the estimated proportion of the total output of the U.S. economy needed to provide Federal SSI benefits. As table
IV.D1 and figure
IV.D1 show, after remaining relatively constant between 1993 and 2013, the total cost of the SSI program relative to GDP declined steadily through 2019, increased slightly in 2020, and decreased substantially in 2021 and 2022, and stayed roughly level in 2023. It is projected to increase slightly in 2024 and then decline throughout the remainder of the projection period.
During the early 1990s, Total Federal SSI payments grew rather rapidly (to 0.33 percent of GDP in 1996) due to a combination of factors (see section IV.B). Following legislation enacted in 1996
1, the cost of SSI decreased as a percentage of GDP beginning in 1997 and continued to decline through 2000. Federal SSI payments as a share of GDP increased slightly after 2000, partly because of a slowdown in economic growth over that period, but resumed its very gradual downward trend from 2003 to 2006 due to relatively slower growth in the number of SSI recipients. Beginning in 2007, however, this trend reversed due to an increase in program recipients and a temporary decline in real GDP during the economic recession that began in that year. Federal SSI payments as a percentage of GDP decreased from 2012 to 2019 as the economy recovered, increased slightly in 2020 due to a decline in GDP during the pandemic-related recession, and decreased substantially in 2021 and 2022 with the rapid economic recovery, and stayed roughly level in 2023. Federal SSI payments as a share of GDP are projected to stay relatively level through 2026 and then continue the gradual downward trend experienced before 2020 due to the net effect of two factors. First, Federal SSI payments, after adjusting for growth in prices, are projected to grow roughly in line with the SSI recipient population (see section
IV.C). Second, using the 2024 OASDI Trustees Report intermediate assumptions, the effect of the real growth in GDP is projected to be greater than the effect of projected increases in SSI recipients. Accordingly, Federal SSI payments are projected to decline as a percentage of GDP throughout the projection period, until it reaches 0.17 percent of GDP by 2048.
