The non-partisan Congressional Budget Office (CBO) has released a new report that documents Social Security under current law is on an unstable course. Opponents of Social Security reform are heralding the report – which projects slightly smaller future deficits – as evidence that the program will endure. Experts from the National Center for Policy Analysis (NCPA), say such a suggestion misstates the impact of the report’s findings.
"Even if the CBO projections are correct, and the deficits racked up by Social Security do not grow quite as fast as the Trustees predict, the government will still have to find a new way to fully fund promised benefits by 2019," said NCPA Policy Analyst Matt Moore in a press release. "The impact on taxpayers will be huge."
According to the NCPA:
The CBO report projects Social Security revenues will no longer be sufficient to fund all promised benefits beginning in 2019 – only a one year delay over the Trustees’ projection of 2018.The CBO report projects a long-term deficit that is approximately 20 percent smaller than the program’s Trustees’ projection of an $10.4 trillion unfunded liability.
This means, barring fundamental reform, the government will need to raise taxes, slash benefits or significantly increase the debt to keep its promises to retirees – even under CBO’s slightly smaller projections.The NCPA notes the disparity between CBO’s projections and those of the program’s Trustees, results from different economic forecasts and methodology. Employing these alternate assumptions, CBO predicts smaller future benefit obligations, which in turn create smaller deficits.
"No one should be celebrating CBO's report," said Moore. "It merely confirms what we already knew – the problem is real, it is huge and we’ll begin feeling the pinch sooner than anyone wants to admit."
