Displaying Federal SSI payments as a percentage of GDP provides a useful perspective on the 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 1992 and 2013, we project the total cost of the SSI program relative to GDP to decline in 2014 and throughout the remainder of the projection period.
Total Federal SSI payments during the 1980s were relatively constant as a percentage of GDP (roughly 0.2 percent). During the early 1990s, SSI 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 continuing through 2000. The share of GDP devoted to Federal SSI expenditures increased slightly after 2000, partly because of a slowdown in economic growth over that period, but resumed its very gradual downward trend from 2002 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. As the economy recovers, we project the gradual downward trend to resume. This ultimate trend is the net effect of two factors. First, we project that Federal SSI expenditures, after adjusting for growth in prices, will grow roughly in line with the SSI recipient population (see section
IV.C). Second, using the 2014 Trustees Report intermediate assumptions, we project that the effect of the real growth in GDP following the recent economic downturn will be greater than the effect of projected increases in SSI recipients. Accordingly, we project that Federal SSI payments will decline as a percentage of GDP throughout the projection period, until it reaches 0.22 percent of GDP by 2038.
