2013 OASDI Trustees Report

B. SOCIAL SECURITY AMENDMENTS SINCE THE 2012 REPORT

Since the Trustees submitted the 2012 report to Congress, one policy has been implemented and one law has been enacted that are expected to have notable financial effects on the OASDI program.

The Deferred Action for Childhood Arrivals policy was implemented on June 15, 2012 by the Department of Homeland Security. This policy directs immigration and border officials to defer deportation actions for certain individuals who immigrated illegally to the United States as children. Deferred action status is granted for two years, with the option to reapply for additional two-year periods thereafter. Those who apply for and receive deferred action status are eligible for employment authorization. Because this policy will lead to additional authorized workers, projected payroll tax income increases slightly. This policy will have a small financial impact over both the short-range and long-range projection periods.

The American Taxpayer Relief Act of 2012, Public Law 112-240, was enacted on January 2, 2013. This law makes permanent most of the lower personal income tax rate provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, which were scheduled to expire on January 1, 2013. The principal exception is that the marginal tax rate for the highest income bracket reverts to the higher level that had been in place prior to the 2001 law. The law also establishes caps on tax deductions and credits for those at upper income levels. This law reduces projected income from taxation of benefits, resulting in a significant financial impact over both the short-range and long-range projection periods.

The financial projections shown in this report include the effects of the implementation of the Deferred Action for Childhood Arrivals policy and the American Taxpayer Relief Act of 2012. Sections IV.A.4 and IV.B.6 of this report provide further analysis of the nature and magnitude of their effects on the financial status of the OASDI program.