While The Titanic’s Orchestra Plays On: CBO Says Social Security Deficit Has Increased 4X Since 2008

On July 15 the Congressional Budget Office rolled out updated projections that show a precipitous decline in Social Security’s solvency. The program’s 75-year deficit has nearly quadrupled since 2008, and the trust fund’s exhaustion date has moved forward by nearly 20 years. Remarkably, the response by progressives is to expand Social Security’s benefits while leaving its multi-trillion-dollar unfunded obligations largely unaddressed.

In 2008 CBO forecast that Social Security faced a 75-year funding shortfall of 1.06% of payroll, which implied that a mere 1.06 percentage point increase in the payroll tax—to 13.46% from the current 12.4%—would keep the system solvent for 75 years. This seemingly minor shortfall caused many on the left—who had fought tooth-and-nail against President Bush’s 2005 efforts to fix Social Security—to mock the very need for reform.

The program’s deficits were small and distant, the argument then went, the trust fund was projected to remain solvent until 2049, and CBO said its estimates were uncertain, which progressives took to mean that insolvency might never happen at all.

More