At the end of 2022, the OASDI program was providing benefit payments
1 to about 66 million people: 51 million retired workers and dependents of retired workers, 6 million survivors of deceased workers, and 9 million disabled workers and dependents of disabled workers. During the year, an estimated 181 million people had earnings covered by Social Security and paid payroll taxes on those earnings. The total cost of the program in 2022 was $1,244 billion. Total income was $1,222 billion, which consisted of $1,155 billion in non-interest income and $66 billion in interest earnings. Asset reserves held in special issue U.S. Treasury securities declined from $2,852 billion at the beginning of the year to $2,830 billion at the end of the year.
The reserves of the combined OASI and DI Trust Funds along with projected program income are sufficient to cover projected program cost over the next 10 years under the intermediate assumptions. However, the ratio of reserves to annual cost is projected to decline from 204 percent at the beginning of 2023 to 96 percent at the beginning of 2029 and remain below 100 percent for the remainder of the 10-year short-range period. Because this ratio falls below 100 percent by the end of the 10th projection year, the combined OASI and DI Trust Funds fail the Trustees’ test of short-range financial adequacy. Considered separately, the OASI Trust Fund fails this test, but the DI Trust Fund satisfies the test. For last year’s report, the combined reserves were projected to be 211 percent of annual cost at the beginning of 2023 and 57 percent at the beginning of 2032.
Under the Trustees’ intermediate assumptions, OASDI cost is projected to exceed total income in 2023, and the dollar level of the hypothetical combined trust fund reserves declines until reserves become depleted in 2034, one year earlier than projected in last year’s report. Figure II.D2 shows the implications of reserve depletion for the combined OASI and DI Trust Funds. Considered separately, the OASI Trust Fund reserves become depleted in 2033, one year earlier than projected in last year’s report, and, as in last year’s report, the DI Trust Fund reserves do not become depleted within the 75-year long-range projection period.
2
To illustrate the magnitude of the 75-year actuarial deficit, consider that for the combined OASI and DI Trust Funds to remain fully solvent throughout the 75-year projection period ending in 2097: (1) revenue would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 3.44 percentage points
3 to 15.84 percent beginning in January 2023; (2) scheduled benefits would have to be reduced by an amount equivalent to an immediate and permanent reduction of 21.3 percent applied to all current and future beneficiaries effective in January 2023, or 25.4 percent if the reductions were applied only to those who become initially eligible for benefits in 2023 or later; or (3) some combination of these approaches would have to be adopted.