Can Faster Growth Save Social Security?

Rudolph G. Penner

IB#15

Introduction

Numerous commissions, individual researchers, and the Trustees of the Social Security system agree that the current Social Security system is not sustainable. The 2003 Trustees’ report forecasts that the program’s two trust funds (Old Age and Survivors Insurance and Disability Insurance) will be empty in 2042. After 2042, Social Security taxes would only cover about 70 percent of projected benefit costs. Even before the trust funds are exhausted, the combination of rapidly growing Social Security, Medicare, and Medicaid spending is likely to create intolerable budget pressures that will force major changes in policy…