(CNSNews.com) – The Social Security program faces $9.6 trillion in unfunded liabilities over the next 75 years, which is up $1 trillion from last year’s projection of $8.6 trillion, according to the latest report from Social Security’s board of trustees.
The unfunded liability is the amount that has been promised in benefits to people now alive that will not be funded by the tax revenue the system is expected to take in to pay for those benefits. (The Social Security trustees calculate the unfunded liability for a period of 75 years into the future, from 2012 to 2087).
Social Security is officially called the Old-Age, Survivors, and Disability Insurance (OASDI) program, and consists of retired workers, their families, and survivors of deceased workers who get monthly benefits under the Old-Age and Survivors Insurance program and disabled workers and their families who get monthly benefits under the Disability Insurance program.
According to the report, “Through the end of 2087, the combined funds [OASI and DI] have a present-value unfunded obligation of $9.6 trillion.” That is “$1.0 trillion more than the measured level of $8.6 trillion a year ago,” states the report, in reference to the data available for 2011.
That $9.6 trillion shortfall equals approximately $83,894 per household based on the Census Bureau's latest estimate that there are 114,430,000 households in the country.
However, “[e]xtending the horizon beyond 75 years increases the measured unfunded obligation,” according to the report. “Through the infinite horizon, the unfunded obligations, or shortfall, equals $23.1 trillion in present value, which represents 4.0 percent of future taxable payroll or 1.4 percent of future GDP.”
That $23.1 trillion shortfall projection is up from the $20.5 trillion projected shortfall in the 2012 report.
According to the World Bank, the Gross Domestic Product (GDP) of the United States in 2011 was $15.09 billion, which represented about 24.35 percent of the world economy.
“Projected long-range costs for both Medicare and Social Security are not sustainable with currently scheduled financing and will require legislative action to avoid disruptive consequences for beneficiaries and taxpayers,” the report reads.