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  C. Strategic Goal: To achieve sustainable [solvency]{.underline} and
  ensure Social Security programs meet the needs of current and future
  generations

  -----------------------------------------------------------------------

Scope: This goal addresses the Agency's responsibility to continually
assess the retirement and disability programs in the context of societal
trends and support reforms to ensure the programs meet the needs of
today's and tomorrow's beneficiaries.

Environmental Factors:

In the 2003 annual report of the Social Security's Board of Trustees,
which includes 75-year projections, the Trustees state that Social
Security is unsustainable over the long term at present payroll tax and
scheduled benefit levels. Additionally, the Comptroller General of the
United States has repeatedly testified that Social Security is
unsustainable over the long term.

Today, about 3.3 people pay into Social Security for every person
receiving benefits. By 2030, this ratio is expected to decline to about
2.2 to1. Social Security now collects more in taxes than it pays out in
benefits. According to the 2003 Trustees Report, Social Security will
begin paying more in benefits than it collects in 2018. By 2042, the
trust funds will be exhausted and the payroll taxes will be insufficient
to pay the benefits owed. If no action is taken, payroll taxes will have
to be increased, the benefits of today's younger workers will have to be
cut, or massive transfers from general revenues will be required.

President Bush established a bipartisan Commission in May 2001 to
address the long-term future of Social Security and directed that
recommendations include individually-controlled, voluntary retirement
accounts to augment Social Security benefits. The Commission proposed
three alternatives, which all included personal savings accounts, as a
way to increase investment returns and ensure Social Security programs
meet the needs of current and future generations. The Commission also
called for a period of debate and discussion to engage the public before
Congress and the Administration take action.

New patterns of work and earnings, marriage, divorce and childbearing
are changing the characteristics of American families. Americans are
living longer and healthier lives. Seventy-nine million baby boomers are
approaching retirement, and, in about 30 years, there will be nearly
twice as many older Americans as there are today. The birth rate is
below the population replacement rate of 2.1 births per woman. The
Americans with Disabilities Act and medical and technological advances
are altering the concept of disability. This and other related concerns
led GAO to add modernizing all federal disability programs to its
high-risk list. Social Security programs must respond to these
developments.

Our strategic objective for this goal is:

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  C.1. Strategic Objective: Through education and research efforts,
  support reforms to ensure sustainable solvency and more responsive
  retirement and disability programs

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Outcome Measure: Provide support to the Administration and Congress in
developing legislative proposals to achieve sustainable solvency for
Social Security and implementing reform legislation

  ----------------------------------------------------------------------
  **FY 2003 and FY 2004 Goal**

  Conduct analysis and make recommendations to the Administration and
  Congress on key issues related to implementing Social Security reforms
  and the administration of personal Social Security retirement accounts
  ----------------------------------------------------------------------

**Outcome Measure:** Percent of adult Americans knowledgeable about
Social Security programs and related issues, including long-range
financing

+-----------------+----------------------------------------------------+
| ## FY           | ### Goal                                           |
+-----------------+----------------------------------------------------+
| 2003            | Develop a baseline                                 |
+-----------------+----------------------------------------------------+
| 2004            | TBD                                                |
+-----------------+----------------------------------------------------+

**Data Definition:** This is the percent of Americans (adults age 18 and
over) determined as "knowledgeable" in the Public Understanding
Measurement System (PUMS) Survey

**Data Source:** Revised PUMS survey

**Means and Strategies for Achieving Sustainable Solvency:**

*[Activities to Support Achieving Social Security
Solvency]{.underline}:* As indicated by our performance goals above, SSA
is strengthening its capacity to respond to decisionmakers' questions
about the fiscal, distributional and administrative effects of proposals
to reform the Social Security and SSI programs. Our actuaries will
continue to provide analysis of proposals that may be considered by
Congress. The retirement income models we are developing, which project
the impact of proposed program changes on beneficiaries, form a
foundation on which various policy scenarios can be analyzed in both the
near-term and long-term to support the reform efforts of the
Administration and the Congress.

The research budget we propose for FY 2004 is for \$30 million in
general funds appropriated under Section 1110 of the *Social Security
Act*, which authorizes research and demonstration projects. This funding
and trust-fund financed demonstration projects allow us to:

-   Strengthen the capacity to analyze proposals for Social Security
    reform;

-   Promote research in critical disability policy areas;

-   Conduct sound evaluations of important Agency initiatives; and

-   Maintain and improve the basic data about our programs and their
    beneficiaries.

*[Activities to Educate the Public]{.underline}:* Through SSA's ongoing
communications program, we will continue to educate the public about
financing challenges facing the Social Security programs. SSA's Regional
Communications Directors, public affairs specialists, and managers
throughout the country will communicate with the public about the
solvency issue. We have revised the *Social Security Statement* and are
in the process of updating informational publications to include
information about the financing structure of the programs and why Social
Security needs to be strengthened.