SOCIAL SECURITY

MEMORANDUM 

Date: May 12, 2005 Refer To: TCA

To: Representative E. Clay Shaw, Jr. 

From: Stephen C. Goss, Chief Actuary 

Alice H. Wade, Deputy Chief Actuary 

Chris Chaplain, Actuary 

Subject: OASDI Financial Effects of the Social Security Guarantee Plus Act of 2005 (H.R. 750) --

INFORMATION

This memorandum provides long-range estimates of the financial effects on the Social Security 

(OASDI) program assuming enactment of the Social Security Guarantee Plus Act of 2005

(H.R. 750), which was introduced on February 10, 2005. This analysis was requested by Tanner 

Sobelman of your staff. These estimates are based on the intermediate assumptions of the 2004

Trustees Report—estimates based on the intermediate assumptions of the 2005 Trustees Report 

are not yet available, but are not expected to differ significantly from those shown in this 

memorandum. 

Enactment of this proposal would eliminate the estimated long-range OASDI actuarial deficit 

(1.89 percent of taxable payroll under present law) and would result in a positive actuarial 

balance of 0.46 percent of payroll based on expected returns on market investments. Positive 

trust fund levels would be projected throughout the next 75 years with assets rising as a 

percentage of annual cost at the end of the period. Thus, under these assumptions, the criteria for 

sustainable solvency would be met. That is, solvency would be expected for the foreseeable 

future. Revenue for the Trust Funds would be expected to be sufficient to allow a reduction in 

the combined OASDI payroll tax rate of 0.4 percentage point in 2046 (from 12.4 to 12.0 

percent). After 2046, further reductions would be possible, reaching a level equal to the cost of 

SSG Account contributions by 2066. However, the financial status of the OASDI program 

would be very sensitive to the actual yields realized on SSG Accounts, particularly yields on 

equities. For example, if SSG Account assets achieved yields only equal to those expected on 

long-term Treasury bonds, the OASDI actuarial balance would not be restored by the proposal. 

Proposal Summary

The Social Security Guarantee Plus (SSGP) Plan would allow workers who have attained age 

18 to voluntarily participate in the Social Security Guarantee (SSG) Accounts beginning with 

earnings received in 2006. The SSG Account of each worker who elects to participate would be 
2

credited with an annual contribution from the General Fund of the Treasury. The annual 

contribution would equal 4 percent of each worker’s OASDI taxable earnings for the year, up to 

$1,000 (value for 2006 and wage-indexed thereafter). Even though participation would be 

voluntary, we assume universal participation for these estimates. Universal participation is 

expected because the plan would guarantee a larger total lifetime benefit for SSG Account 

participants than for non-participants. In addition to regular monthly benefits, which can be no 

lower than those scheduled in current law, participants would receive a lump sum payment at 

initial benefit entitlement equal to 5 percent of their account balance at that time. Participants 

who work after initial benefit entitlement would receive additional lump sum payments equal to 

5 percent of the resulting contributions (plus deemed interest) to their SSG Accounts. 

Under the plan, assuming universal participation, regular monthly benefits are expected to be at 

least as large as the current-law scheduled Social Security benefit amount for all beneficiaries. 

SSG Account balances (less the 5-percent lump-sum payment) would, commencing at the 

worker’s retirement (or disability) benefit entitlement, be gradually withdrawn and transferred to 

the OASDI Trust Funds. The beneficiary would receive monthly benefits from the OASDI Trust 

Funds equal to the higher of: 

• The beneficiary 's monthly benefit amount scheduled under current law, and 

• The computed SSG monthly withdrawal amount, based on a CPI-indexed, unisex lifeannuity calculation. 

The life-annuity calculation would be made on a joint and two-thirds survivor basis for married 

workers. Workers who choose not to have a SSG Account would receive scheduled Social 

Security benefits only. Further details on SSG Account distributions are provided in the 

subsection below, entitled SSG Account Distributions. 

Under the proposal, if at some point in the future the Trustees Report intermediate projection of 

the financial status of the OASDI program indicates a current and sustained level of OASDI 

income in excess of what is needed to meet net program cost (and maintain a stable trust fund 

ratio of at least 100 percent), then the Managing Trustee would be authorized to make 

recommendations to the Congress indicating the extent to which the Trust Funds are expected to 

be able to finance the contributions to the SSG Accounts, in lieu of financing solely from the 

General Fund of the Treasury. The Congress would decide whether or not to act on such 

recommendations at that time. 

The proposal would also include a number of specific changes in OASDI benefits. These 

changes include: 

• The gradual elimination (between 2006 and 2011) of the Social Security retirement earnings 

test for beneficiaries who have attained age 62 but not their NRA; 

• Increasing the benefits of widow and widowers, whose benefits are generally lower than 

average, to as much as 75 percent of the benefit that the couple would have been receiving if 

both were still alive; 

• Extending eligibility to some disabled widows and widowers; 

• Providing child care credits for up to 5 years; and 

• Reducing government pension offset from two-thirds to one-third of the government 

pension. 
3

Provisions of the Proposal

SSG Account Contributions and Investment Up To Benefit Entitlement 

The proposal would provide all participating Social Security covered workers with refundable 

tax credits to finance SSG Account contributions equal to 4 percent of their OASDI taxable 

earnings (up to a specified dollar limit) starting with earnings for calendar year 2006. The dollar 

limit for 2006 would be $1,000. For subsequent years, the dollar limit would be increased by the 

growth in the SSA average wage indexing series. Credits would be increased with interest from 

July 1 of the year of taxable earnings until deposited in the SSG Account, at the market yield 

provided for securities newly issued to the OASI and DI Trust Funds. Credits would be 

transferred from the General Fund of the Treasury to SSG Accounts as soon as practicable in the 

following calendar year (expected to be generally by October 15 for wages and salaries and by 

December 1 for self-employment earnings). 

Accounts would be established as soon as practicable. For the purpose of these estimates, it is 

assumed that accounts would be established by the end of 2007. Delay to 2008 would not 

materially affect the results. Account balances would be collectively invested in qualified 

mutual funds, managed by certified account managers under contract with and regulation by the 

Social Security Guarantee (SSG) Board. The Board would initially consist of the six individuals 

appointed by the Board of Trustees of the OASDI Trust Funds to 3, 6, or 9-year terms. 

Individuals would be required to hold all SSG Account assets in a single fund and could change 

funds at most once per year. Annual SSG credits as well as assets being shifted from one fund to 

another would be pooled and transmitted to the mutual fund managers under regulations 

prescribed by the Treasury in consultation with the SSG Board. Account holders would receive 

annual notices of assets, investment performance, and administrative costs in their Social 

Security statements. Individual records of account balances and transactions would be 

maintained by the SSG Board. 

The proposal specifies three investment options. The default option would require that account 

balances be invested in qualified mutual funds maintained with a portfolio allocation of 60 

percent stock index funds and 40 percent high-grade corporate bond index funds. The other two 

options are similar, differing only in the portfolio allocation percentages (65 percent stock / 35 

percent bonds and 70 percent stock / 30 percent bonds). Switching among options would be 

allowed once per year. The charge for annual administrative expenses would be limited to 25 

basis points starting with the fifth year after enactment. Allowance for administrative expense 

approved by the Board in excess of 25 basis points would be made for the first 5 years of 

operation (2006-10) and would be payable from the General Fund of the Treasury. Withdrawals 

prior to reaching retirement (or death or disability) would not be permitted. 

Upon divorce before benefit entitlement from a marriage that lasted 1 year or longer, the 

amounts attributable to contributions during the marriage (including earnings on those 

contributions) in each spouse’s SSG Account would be reallocated evenly between the SSG 

Accounts of the spouses. 
4

SSG Account Distributions 

Under the plan, workers would receive 5 percent of the SSG Account balance as a lump sum 

distribution upon initial benefit entitlement. The remainder of the SSG Account balance for 

workers who become entitled to OASDI retirement or disability benefits would be gradually 

withdrawn and transferred to the OASDI Trust Funds. Upon entitlement for Social Security 

retirement or disability benefits, the Social Security Administration would compute the monthly 

SSG withdrawal amount as the monthly payment that could be provided from a life annuity 

purchased with the holdings in the SSG Account remaining after the lump sum payment. The 

annuity calculation would reflect the expected yield on the SSG Account (under the specified 

post-entitlement investment of 65 percent stocks and 35 percent corporate bonds, less 25 basis 

points for administration) and indexing of annuity payments for price inflation (using the 

present-law Social Security COLA). The annuity calculation would also roughly reflect the 

expected payment of aged spouse and aged survivor benefits if the worker has a current spouse, 

by using a joint annuity with two-thirds of the base payment payable when either (1) only the 

worker is eligible, or (2) either spouse is a survivor. 

The Social Security Administration would schedule payments from the Trust Funds for life equal 

to the larger of (a) the computed monthly SSG annuity amount and (b) the current-law scheduled 

OASDI benefit. Each month after benefit entitlement the computed annuity amount based on 

entitlement of the worker and any aged spouse(s) would be transferred from the SSG Account to 

the OASDI Trust Funds. 

Life annuity calculations for the purpose of determining the size of monthly transfers from SSG 

balances to the OASDI Trust Funds would be based on the assumption of a real yield equal to the 

net expected ultimate average real yield on SSG Accounts at the time of benefit entitlement. 

Mortality estimates and yields for these calculations would be based on the intermediate 

projections of the then-current Trustees Report. 

Because the computed annuity amount is based on a life annuity calculation, the SSG Account 

would be expected to be depleted at about the point where the beneficiary(ies) reach their life 

expectancy, as estimated at the time of benefit entitlement. Thus, for about half of the SSG 

Accounts, benefits will be payable after exhaustion of the SSG Account entirely at the expense 

of the OASDI Trust Funds. For the other half, death before life expectancy will leave remaining 

SSG balances that would then be transferred to the Trust Funds (to assist in the payment of 

benefits to those who live beyond life expectancy). 

For married workers who die after becoming entitled to OASDI retirement or disability benefits, 

SSG Account withdrawals will continue to be paid to the OASI Trust Fund in the amount of the 

survivor portion of the annuity calculation. When an unmarried person (including a widow or 

widower) dies after benefit entitlement, the remaining balance in the SSG Account is transferred 

to the OASDI Trust Funds. 

For workers who die before becoming entitled to OASDI retirement or disability benefits, the 

SSG Account balance is transferred to the estate of the deceased worker tax free. For individuals 
5

who have reached their normal retirement age and are not eligible for a retired-worker, aged 

spouse, or aged surviving spouse benefit under current law, their SSG Account balance would be 

transferred to them in a lump sum. 

Taxation of SSG Accounts and Distributions 

All yields on account balances would accumulate tax-free. Annuitized distributions would be 

transferred to the Trust Funds to finance the payment of OASDI benefits that would be taxable as 

under current law. In cases where the annuity proceeds exceed the Social Security benefit 

amounts, the excess annuity proceeds are also taxable in the same manner as Social Security 

benefits. 

Lump sum distributions at initial benefit entitlement would be taxed as OASDI benefits. 

However, the percentage of the lump sum to be included as taxable would be equal to the 

percentage of OASDI monthly benefits for the year that are included in taxable income without 

including the lump sum payment in the calculation. 

Distributions of account balances to the estates of workers who die before benefit entitlement 

would not be taxable as benefits, nor would they be subject to estate tax. 

Additional Changes to OASDI Benefits 

Provision 1: Increased Benefit for Widow(er)s 

Surviving spouses who are eligible for aged or disabled widow(er) benefit would receive 75 

percent of the benefit that the couple would be receiving if both were still alive, if advantageous. 

This alternative benefit, however, would be limited by a benefit cap. The initial benefit cap for a 

surviving spouse would equal: 

• The average PIA for all retired worker beneficiaries in the December of the year prior to 

initial entitlement to the surviving spouse benefit times

• The actuarial reduction factor that would apply as a retired worker1

 (based on the survivor’s 

age at entitlement to a surviving spouse benefit). 

The benefit cap would subsequently be increased by the same cost-of-living increases that apply 

to benefits (COLA). For surviving spouses with entitlement prior to the effective date of this 

provision, we assume that the benefit cap would be determined as of the December before the 

effective date. 

The couple benefit reflects any actuarial reductions (or DRC) that apply to either spouse. If the 

deceased spouse had not become entitled to a benefit, then the deceased spouse would be deemed 

to have become entitled at the date of death, or the attainment of age 62, whichever would occur 

later. The deceased spouse's benefit would subsequently be increased by the COLA from the 

deemed date of entitlement until the month of the survivor's entitlement to surviving spouse 

benefits. 

 

1

 If the surviving spouse is under age 62, the actuarial reduction is equal to the worker's actuarial reduction that 

would apply if the surviving spouse were age 62. 
6

This provision is effective for all benefit entitlement for months beginning with December of the 

calendar year of enactment. Implementation of this provision alone would increase the size of 

the long-range OASDI actuarial deficit by an amount estimated at 0.08 percent of taxable 

payroll. 

Provision 2: Extend Benefits to Disabled Surviving Spouses Who are Under Age 50 

For benefit entitlement for December of the calendar year of enactment and later, allow disabled 

widows of any age to be eligible for disabled surviving spouse benefits. Remarriage before age 

50 would terminate (or preclude) eligibility for the disabled surviving spouse benefit. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

a negligible amount (i.e., less than 0.005 percent of taxable payroll). 

Provision 3: Eliminate the 7-Year Limitation for Disabled Surviving Spouses 

For benefit entitlement for December of the calendar year of enactment and later, eliminate the 

requirement for disabled widow(er) benefits that disability must occur no later than 7 years after 

the worker’s death, or after surviving spouse with child-in-care benefits were payable. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

a negligible amount (i.e., less than 0.005 percent of taxable payroll). 

Provision 4: Waive the Two-Year Duration of Divorce Requirement 

For benefit entitlement for December of the calendar year of enactment and later, waive the twoyear duration of divorce requirement for divorced spouse benefit eligibility, in cases where the 

worker remarries someone other than the claimant before the two-year period has elapsed. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

a negligible amount (i.e., less than 0.005 percent of taxable payroll). 

Provision 5: Provide Child-Care Credits 

For benefit entitlement for months beginning with December of the calendar year of enactment, 

provide child-care credits for up to 5 years during which the worker was living with and 

providing care for his/her own child (or spouse's child) under the age of 7. The child-care credit 

would raise reported earnings for a qualifying year up to 25 percent of the AIME that would 

have been determined if the worker had become entitled for disabled worker benefits in January 

of the qualifying year (disability insured status is not required for the credit). The amount of the 

credit for any qualifying year would not be less than the credit for any prior qualifying year. We 

assume that child-care credits would not be used to establish insured status not already earned by 

the worker through actual earnings in covered employment. Implementation of this provision 

alone would increase the size of the OASDI actuarial deficit by an amount estimated at 0.02 

percent of taxable payroll. 
7

Provision 6: Reduce Government Pension Offset 

The present-law GPO provision reduces OASDI auxiliary benefits for spouses and surviving 

spouses by two-thirds of any non-covered government pension that they receive. For benefit 

entitlement for months beginning with December of the calendar year of enactment, this 

provision would change this reduction to one-third of any non-covered government pension. 

Implementation of this provision alone would increase the size of the OASDI actuarial deficit by 

an amount estimated at 0.02 percent of taxable payroll. 

Provision 7: Earnings Test Elimination at Ages 62 to NRA 

The Social Security earnings test annual exempt amounts for ages 62 to NRA would be raised 

according to a specified schedule through 2010, and the test would be eliminated starting 2011 

for all beneficiaries at ages 62 to NRA. For beneficiaries under age 62, the current test would 

remain unchanged. The exempt amounts would be specified for the test applicable at ages 62 up 

to the year of attainment of NRA as $15,000, $20,000, $25,000, $30,000, and $35,000, for years 

2006 through 2010, respectively. This provision alone would increase the size of the present law 

OASDI actuarial deficit by an estimated 0.01 percent of taxable payroll. 

Assumptions

As indicated above, estimates provided in this memorandum are based on the intermediate 

assumptions of the 2004 Trustees Report. Additional assumptions regarding SSG Accounts are 

described below. 

Participation Rates 

For years after 2005, all workers who have attained age 18 and have OASDI taxable earnings are 

assumed to participate in SSG Accounts. (Under the plan, any worker who did not participate 

would receive Social Security benefits scheduled under current law.) By participating, workers 

would be guaranteed to receive more than if they did not participate on the basis of one or more 

of the following: 

• A lump sum payment of 5 percent of the account balance is payable upon the worker's initial 

benefit entitlement, 

• The entire account balance goes to the estate at death before benefit entitlement, and 

• In some cases the annuity calculation will produce monthly payments that are greater than 

the OASDI benefit that would otherwise be payable. 

SSG Account Yield 

We assume that many investors will pick the investment option with the highest percentage 

allocation in stocks i.e., 70 percent stock and 30 percent corporate bonds, in order to maximize 

their expected rate of return (based on historical experience). Many individuals would be 

expected to prefer this option because the proposal provides a 5-percent SSG Account lump-sum 
8

payment at benefit entitlement plus a guarantee that regular monthly benefits will not be reduced 

as a result of SSG Account participation, regardless of the investment outcome. However, many 

other individuals would remain with the default portfolio allocation of 60 percent stock and 40 

percent corporate bonds. Therefore, we assume that the aggregate average portfolio for SSG 

Accounts will be halfway between these two allocations—i.e., an average portfolio of 65 percent 

stock and 35 percent corporate bonds. 

The ultimate average real yield on corporate bonds is assumed to be 3.5 percent, or 0.5 

percentage point above the Trustees intermediate assumption for long-tern Treasury bonds. In 

addition, the long-term ultimate average annual real yield assumed for equities is 6.5 percent. 

This is somewhat lower than the historical real equity yield over the last several decades. With 

an assumed ultimate administrative expense of about 0.25 percent (25 basis points) of assets per 

year, the expected ultimate average annual real portfolio yield, net of administrative expense 

(based on a 65 percent stocks/ 35 percent bonds allocation) equals 5.20 percent, 

 (0.65*6.5% + 0.35*3.5% - 0.25% = 5.2%). 

Variation in realized yield will, however, be substantial both across generations and among 

individuals within each generation. In order to understand the implications of this variability, a 

second set of estimates is provided reflecting a low yield, or risk-adjusted yield, for SSG 

Accounts assets equal to the assumed long-term Treasury bond yield of 3 percent over inflation. 

In addition, due to the large degree of uncertainty associated with future returns (particularly for 

equities), sensitivity analysis is provided, illustrating the effect of varying the yield on the SSG 

Account by plus and minus one percentage point. 

It should be noted that the precise effects of implementing a plan that would result in a 

significant demand for equities and corporate bonds on the yields of these securities is not clear. 

This demand would likely be at least partially offset by reductions in demand for other 

investment mechanisms. For the purpose of these estimates, it is assumed that there will be no 

net dynamic feedback effects on the economy or on the financial markets. 

As stated above, the long-term ultimate average annual real yield on stock (equity) investments 

made in the future is assumed to be 6.5 percent. A consensus appears to have formed among 

economists that equity pricing, as indicated by price-to-earnings ratios, may average somewhat 

higher in the long-term future than in the long-term past. This is consistent with broader access 

to equity markets and the belief that equities may be viewed as somewhat less “risky” in the 

future than in the past. Equity pricing will vary in the future as in the past. Price-to-earnings 

ratios were very high through 1999, and are now lower. The lower-than-historical average 

ultimate real yield assumed for equities purchased in future years is consistent with an average 

ultimate level of equity pricing somewhat above the average level of the past. 

The assumption for an ultimate real equity yield of 7 percent that was used by the Office of the 

Chief Actuary until 2001 was developed in 1995 with the 1994-96 Advisory Council. At that 

time, the Trustees assumption for the ultimate average real yield on long-term Treasury bonds 

was 2.3 percent. Real yields on corporate bonds are believed to bear a close relationship to 

Treasury bond yields of similar duration. The 2004 Trustees Report includes the assumption that 
9

the ultimate real yield on long-term Treasury bonds will average 3 percent, or 0.7 percentage 

point higher than assumed in 1995. This increase in the assumed bond yield is consistent with a 

reduction in the perceived risk associated with equity investments. 

The ultimate average annual real yield on long-term corporate bonds is assumed to average 3.5 

percent, or 0.5 percentage points higher than the 3.0 percent real yield for U.S. Government 

long-term securities, as assumed for the 2004 Trustees Report. This spread between corporate 

and U.S. Government bond yields is consistent with the spread experienced over the past 40 or 

70 years, on average. It should be noted, however, the spread has been much smaller over the 

past 20 years. 

An administrative expense factor of 0.25 percent (25 basis points) of assets per year is assumed 

for the SSG Accounts. Determination of SSG Account contributions would be made based on 

records currently maintained by the Social Security Administration. SSG Account records and 

actual investments (on a pooled basis) would be made by a central authority. Moreover, we are 

assuming 100 percent participation in SSG Accounts. Thus, the specified ultimate 

administrative-expense level of 25 basis points for SSG Accounts appears to be reasonable. 

Variability in Account Returns 

The plan provides that the total Social Security monthly benefit payment for SSG Account 

participants would be no less than the benefit for non-participants. When the annuitized amount 

for a worker's SSG Account exceeds the scheduled monthly OASDI benefit, the excess is 

payable to the beneficiary. However, when the annuity payment from the SGA is less, then the 

full OASDI monthly benefit is still payable. Thus, variation across generations in the realized 

lifetime yield on SSG Accounts (both in accumulation and annuitization) would result in a 

greater degree of excess payments over time, than if yields were always consistent at the 

assumed average rates. The effect of this variability is modeled assuming a distribution of 

lifetime yields for future beneficiaries. 

With the yields assumed for these estimates, expected transfers from SSG Accounts after benefit 

entitlement would generally be less than expected OASDI monthly benefits. However, single 

workers with near average earnings but who still contribute 4 percent (or nearly 4 percent) of 

their salaries to the SSG Accounts throughout their careers, could have transfers from their SSG 

Accounts greater than current law benefits if the investment return during their working years 

exceeded the assumed long-range average return used for these estimates. Married workers with 

similar earnings levels would be less likely to have transfers that exceed current-law benefits 

because the joint-and-survivor annuity calculation would provide lower transfers than for single 

workers, and current law OASDI benefits for married workers would tend to be higher. 

III. Projected Financial Effects of the Proposal

Table A provides a provision-by-provision summary of the financial effects of the proposal on 

the OASDI program, including the seven additional changes to OASDI provisions listed above. 

The combined effect of the seven additional changes to OASDI benefits would reduce (worsen) 
10

the long-range OASDI actuarial balance by about 0.14 percent of taxable payroll, from a balance 

of -1.89 percent of payroll under current law to an actuarial balance of -2.03 percent of payroll. 

However, because the monthly transfers from the SSG Accounts to the Trust Funds are expected 

to far exceed the additional benefit payments from the Trust Funds, the overall financial status of 

the OASDI program would greatly improve under this plan. 

The estimates expected for the SSGP Plan with full payroll taxes retained for the OASDI 

program (detailed estimates shown in the attached tables 1, 1a, 1b, 1c, and 1d) indicates that the 

OASDI actuarial balance would be improved by 2.35 percent of effective taxable payroll, from a 

balance of –1.89 percent under current law to a balance of 0.46 percent of payroll under the plan. 

The amount of assets in the OASDI Trust Funds as a percent of annual OASDI outgo (the trust 

fund ratio) would be expected to remain positive throughout the long-range 75-year projection 

period, thus allowing timely payment of benefits in full through 2078, and beyond. The trust 

fund ratio would be expected to decline to about 122 percent at the beginning of 2049, and to 

increase thereafter, reaching 697 percent by the end of 2078. The Trust Funds would be stable or 

rising by an estimated 32 percent of annual cost at the end of the period. 

For both present law and the SSGP plan, the summary table below provides the estimated 

OASDI actuarial balance, the estimated year of combined OASDI trust fund exhaustion, and the 

estimated annual percentage point change in the OASDI trust fund ratio at the end of the period 

(between 2078 and 2079). The OASDI program achieves sustainable solvency for the 

foreseeable future when the trust fund ratio is stable or rising at the end of 75 years. 
11

Estimated Effects on OASDI Financial Status of 

the Social Security Guarantee Plus (SSGP) Plan

 Estimated 

OASDI 

Actuarial 

Balance 

(percent of 

taxable payroll)

Year of 

Exhaustion 

of OASDI 

Trust Funds

Percentage 

Point Change 

in Trust Fund 

Ratio Between 

2077 and 2078

Present Law (No SSG) -1.89 2042 -48 2/ 

(1) SSGP Plan with Full Payroll Tax for OASDI

65% Stock, 35% Corporate Bond 

Assess 0.25% Administrative Cost +0.46 N/A 32 

(2) SSGP Plan with Potential Financing of SSG 

Contributions from Payroll Tax 1/ 

65% Stock, 35% Corporate Bond 

Assess 0.25% Administrative Cost +0.05 N/A 3 

 

1/ SSG contributions would be financed partially from the payroll tax starting 2046 and totally from the payroll tax 

starting 2066. 

2/ Reduction in TFR in last year prior to Trust Fund exhaustion. 

Based on intermediate assumptions of the 2004 Trustees Report and other assumptions described in the text of this 

memorandum.

The summary table above also includes an illustration of the potential financial effect of the 

SSGP Plan on Social Security if the SSG Account contributions were partially financed from the 

payroll tax during the period 2046-2065 and fully financed from the payroll tax beginning in 

2066. Under the proposal, the Managing Trustee would be required to make such 

recommendations to the Congress. The payroll tax that could be redirected from directly 

financing OASDI to financing SSG contributions is expected to be 0.4 percentage points in 

2046-2050 and to increase thereafter reaching about 2.28 percentage points (reflecting the 

aggregate contribution rate as a percent of taxable payroll) by 2066. Under this illustration, the 

OASDI actuarial balance would be improved by 1.93 percent of taxable payroll, from a balance 

of -1.89 percent under current law to a positive balance of 0.05 percent of payroll. The OASDI 

trust fund ratio is estimated to be rising by about 3 percent at the end of the long-range period. 

Thus, as of the end of 2078, assets in the OASDI Trust Funds would be about 1.6 times the outgo 

for 2079. Trust Fund assets at this level are needed to generate interest sufficient to maintain the 

TFR with SSG contributions fully financed from the Trust Funds. 

Sensitivity to SSG Account Investment Yields 

The effect of the SSGP Plan on the financial status of the OASDI program would depend greatly 

on the actual yield that is achieved for investments in the SSG Accounts. Returns on all 

investments are uncertain, and returns on stocks are particularly variable and uncertain over time. 

For this reason it is important to consider the sensitivity of the financial status of the OASDI 
12

program to possible variation in expected average long-term investment yield. Note that the 2004 

Trustees Report provides this sensitivity analysis for the OASDI program under current law on 

pages 154 through 155. 

The summary table below provides the estimated OASDI actuarial balance, the estimated year of 

combined OASDI trust fund exhaustion, and the estimated annual percentage point change in the 

OASDI trust fund ratio at the end of the period (between 2078 and 2079, or in the last year prior 

to Trust Fund exhaustion, if earlier) for present law, for the SSGP Plan with expected yields on 

SSG Accounts, and for the SSGP Plan with three different SSG Account yield assumptions. The 

three different yield assumptions are presented in order to illustrate the sensitivity of the proposal 

to possible variation in the ultimate average returns on stock and corporate bonds. 

Sensitivity Analysis: Effect of Variation in Expected SSG Account 

Investment Yield Rates on OASDI Financial Status 1/

 Estimated 

OASDI 

Actuarial 

Balance 

(percent of 

taxable payroll)

Year of 

Exhaustion 

of OASDI 

Trust Funds

Percentage 

Point Change 

in Trust Fund 

Ratio Between 

2078 and 2079

Present Law (No SSG) -1.89 2042 -24 2/ 

SSGP Plan with 65% Stock, 35% Corporate Bond 

Assess 0.25% Administrative Cost +0.46 N/A 32 

(a) SSGP Plan with 1% Higher Than Expected 

Yield: 6.20% average net yield +1.40 N/A +156 

(b) SSGP Plan with 1% Lower Than Expected 

Yield: 4.20% average net yield -0.20 2053 -8 2/ 

(c) SSGP Plan with Yield Equal to Expected 

Yield on Government Bonds: 2.75% average 

net yield 3/ -0.83 2046 -17 2/

1/ No payroll tax rate reduction 

2/ Reduction in TFR in last year prior to Trust Fund exhaustion. 

3/ This sensitivity analysis is discussed in more detail in the subsection “Estimates with Low or Risk-Adjusted 

Yields on Assets.” 

Based on intermediate assumptions of the 2004 Trustees Report and other assumptions described in the text of this 

memorandum.

Under sensitivity illustration (a), the average long-term yield on SSG Accounts is assumed to be 

1 percentage point higher than expected for the accounts invested in 65 percent stock and 35 

percent corporate bonds. Under this illustration, the OASDI trust fund ratio would be expected 

to reach a low of about 203 percent at the beginning of 2043, and to increase substantially 

thereafter. The trust fund ratio is rising by 156 percentage points per year at the end of the 75-
13

year period. OASDI would be substantially over-financed and the SSG Account contributions 

could be paid entirely from the payroll tax rate as early as 2042 while still maintaining a positive 

long OASDI actuarial balance and a trust fund ratio of at least 100 percent for each year of the 

75-year period that is stable or rising at the end of the period. 

Under sensitivity illustration (b), the average yield on SSG Accounts is assumed to be 

1 percentage point lower than expected for the accounts invested in 65 percent stock and 35 

percent corporate bonds. Under this illustration, the OASDI trust fund ratio would be expected 

to decline starting in 2016, and Trust Fund exhaustion would be estimated to occur in 2053. The 

OASDI actuarial balance would be improved by about 1.69 percent of taxable payroll under this 

assumption, leaving an actuarial deficit of 0.20 percent of payroll. 

Under sensitivity illustration (c), the average yield on SSG Accounts is assumed to be only 2.75 

percent above price inflation (the rate for government bonds less 25 basis points for 

administrative expense). Under this illustration, the OASDI trust fund ratio would be expected 

to decline starting in 2017, and Trust Fund exhaustion would be estimated to occur in 2046. The 

OASDI actuarial balance would be improved by about 1.06 percent of taxable payroll under this 

assumption, leaving an actuarial deficit of 0.83 percent of payroll. 

Trust Fund Operations 

Table 1 shows estimated annual and summarized income rates, cost rates, balances, and trust 

fund ratios under the proposal. The table shows the “effective” OASDI contribution rate, which 

remains at 12.4 percent throughout the 75-year period. The last three columns display the SSG 

Account contribution rate by source (OASDI Trust Funds or General Fund of the Treasury) and 

the total SSG Account contribution rate. The table shows that, for this illustration, all SSG 

Account contributions are funded by the General Fund of the Treasury. 

Program Assets 

Table 1a provides an analysis of General Fund contributions under the plan and of OASDI Trust 

Fund and SSG Account assets. Columns 1 through 3 provide the estimated amounts of General 

Fund contributions to SSG Accounts, expressed in constant 2004 dollars, present value as of 

1/1/2004, and as a percentage of taxable payroll. Column 4 provides the cumulative total 

amount of these contributions from the General Fund of the Treasury through the end of each 

year. 

Total projected OASDI Trust Fund assets are shown in column 5. For purpose of comparison, 

the OASDI Trust Fund assets are also shown in columns 8 and 9 for a theoretical Social Security 

program where borrowing authority is assumed for the Trust Funds. The theoretical Social 

Security program with borrowing authority is presented both without and with the contributions 

to SSG Accounts from the General Fund of the Treasury that are specified under the proposal, in 

columns 8 and 9, respectively. 
14

If the SSG Accounts are considered as a part of a “total system”, along with the OASDI 

program, then it is reasonable to consider “total system assets”. These would be the sum of net 

OASDI Trust Fund assets and SSG Account assets (columns 5 and 6). Under the intermediate 

assumptions and assuming full annuitization of SSG Account assets, total system assets are 

expected to be large and growing in real terms at the end of the 75-year projection period. 

Effect on Federal Unified Budget 

Table 1b (present value dollars) and table 1b.c (constant dollars) provide estimates of the effect 

on federal unified budget cash flows and balances under this plan and these assumptions. All 

values in these tables represent the amount of the change that would be expected as a result of 

implementing the proposal, from the level that would be projected under current law. 

The effect of the plan on unified budget cash flow (column 4) would be expected to be negative 

initially, but positive starting 2041. This total cash flow change is the combination of the 

specific plan effects shown in columns 1-3. Including the cumulative effects of interest, the year 

in which the effect of the SSGP plan on the unified budget annual balance would be expected to 

become permanently positive is 2060. It is important to note that these estimates are based on 

the intermediate assumptions of the 2004 Trustees Report and thus are not consistent with 

estimates made by the OMB or the CBO based of their assumptions. 

The first three columns in these tables include sources of changes to the unified budget balance, 

as follows: 

• Annual aggregate contributions made to SSG Accounts (column 1)--these amounts result in a 

reduction to the unified budget balance because the monies leave the government and are 

deposited in personal accounts; 

• Transfers to OASDI Trust Funds from SSG Accounts (column 2)--an increase to the unified 

budget balance because these proceeds reduce Social Security benefit payments; and 

• Other changes in OASDI cash flow (as compared to present law) from the other benefit 

provisions (column 3). 

The last three columns present the aggregate effects on the unified budget: 

• Change in the annual unified budget cash flow (column 4), which is simply the sum of the 

sources of unified budget balance changes identified above in columns 1-3; 

• Change in debt held by the public, as of the end of each year (column 5), which represents 

the cumulative change in the unified budget cash flows, with interest (at the assumed rates 

earned by the Trust Funds); and 

• Change in annual unified budget balance (column 6), which includes changes in both unified 

budget cash flow and in interest on the publicly held debt. 

Cash Flows from the OASDI Trust Funds to the General Fund of the Treasury 

Table 1c provides estimates of the net cash flow from the OASDI Trust Funds to the General 

Fund of the Treasury. Revenue paid by the Treasury to the Trust Funds for the redemption of the 

special-issue Treasury obligations held by the Trust Funds is included here as a negative cash 
15

flow to the General Fund. To the extent that General Fund transfers are invested in special-issue 

Treasury obligations and are subsequently redeemed, they will, upon redemption, affect cash 

flow between OASDI Trust Funds and the General Fund of the Treasury. 

Values in Table 1c are shown as a percent of taxable payroll, in current dollars, in present value 

dollars as of 1/1/2004, and in constant 2004 dollars (discounted to 2004 with the projected 

growth in the CPI). For comparison purposes, net cash flow is also shown for a theoretical 

Social Security program where transfers from the General Fund of the Treasury to the OASDI 

Trust Funds are assumed to occur as needed to assure full payment of scheduled benefits in 2042 

and later. 

Change in Long-Range Trust Fund Assets/Unfunded Obligation 

Table 1d provides estimates of the amounts of the assets in the combined OASI and DI Trust 

Funds at the end of each year, in present discounted value. Negative values do not indicate 

levels of trust fund assets as the program does not have borrowing authority. Instead, negative 

values reflect the magnitude of the unfunded obligation of the program through the end of the 

year. The first column presents these estimates under present law, where the unfunded 

obligation is $3.7 trillion through 2078, the end of the 75-year long-range period. 

Columns 2 and 3 show the annual expected effects of the components of the proposal that move 

the OASDI program to elimination of the unfunded obligation. These include the basic OASDI 

changes (column 2) and the transfers to the trust funds from the SSG Accounts (column 3). 

The combination of the annual effects in columns 2 and 3 is accumulated in column 4, showing 

the effect on projected trust fund assets, or on the unfunded obligation, through the end of each 

year. The final column shows the resulting trust fund asset levels projected under the proposal. 

The overall effect of the proposal is to transform the projected $3.7 trillion long-range unfunded 

obligation for the program under current law into an expected positive trust fund balance of $1.1 

trillion at the end of the period. 

Estimates with Low or Risk-Adjusted Yields on Assets 

Tables 2, 2a, 2b, 2c, and 2d provide an analysis of the implications of realizing actual real yields 

on SSG Account assets that are equal to the assumed average real yield on long-term Treasury 

bonds, or 3 percent. This may be viewed as either illustrating the case where the average real 

yield on equities and corporate bonds is no higher than on government bonds, or illustrating the 

effect of assuming “risk-adjusted” returns on equities and corporate bonds. In either case, the 

“expected” yield on annuitized assets is assumed to match the actual yield, on average. 

The historically higher returns on equities and corporate bonds than on Treasury bonds are 

associated with the relatively higher degree of variability in the returns on these assets. One way 

of accounting for the combination of this increased variability and the associated higher expected 

return that is demanded in the markets because of it, is to portray the returns of the more variable 
16

assets as being the same as the relatively low-yield asset, Treasury bonds. Tables 2 through 2d 

serve this purpose. It should also be noted that while average real yields for equities have been at 

or below average bond yields for periods of a decade or so, the likelihood of having such a low 

average yield for a period of several decades seems extremely low. 

Differences between tables 1 and 2 are significant because the lower assumed yield on IA assets 

reduces the transfers to the OASDI Trust Funds based on the SSG Account proceeds. The 

summarized cost rate for the 75-year period under the “risk-adjusted” yield scenario is lower 

than under the expected yield scenario by 1.28 percent of taxable payroll. Assuming riskadjusted returns on SSG Accounts, the actuarial balance would improve by an estimated 1.06 

percent of payroll, leaving an actuarial balance of -0.83 percent of payroll. The exhaustion year 

of the Trust Funds is estimated at 2046, four years later than under current law. 

Additional Tables on OASDI Trust Fund Operations 

Tables 3, 4, and 5 provide projected OASDI financial effects under each of the following 

illustrations outlining future assumed yields on the SSG Accounts: 

• An assumed SSG Account yield of 5.20 percent real with funding of the SSG Accounts to 

be partially provided by redirection of OASDI payroll taxes in 2046 and completely 

provided by redirection of OASDI payroll taxes by 2060 (table 3); 

• An assumed 1-percent higher SSG Account yield of 6.20 percent real with SSG 

contributions funded by the General Fund indefinitely (table 4); 

• An assumed 1-percent lower SSG Account yield of 4.20 percent real with SSG 

contributions funded by the General Fund indefinitely (table 5); and 

Tables 3 through 5 include estimated annual and summarized income rates, cost rates, and 

balances under each sensitivity illustration of the proposal. The tables also show the trust fund 

ratio for each year, as well as changes in contribution rates to the OASDI Trust Funds and 

taxable payroll under the proposal. 

 

 Stephen C. Goss 

 

 Alice H. Wade 

 

 Chris Chaplain 

Attachments: 16 
Table A--Estimated Long-Range OASDI Financial Effect of H.R. 75, 

“Social Security Guarantee Plus Act of 2005” 

 (Assumes universal participation in SSG Accounts) 

Provision

Estimated Change in 

Long-Range OASDI 

Actuarial Balance 1/ 

(as a percent of payroll)

Provide widow(er)s a benefit alternative equal to 75 percent of the combined benefit that 

would be payable if both spouses were still alive. Widow(er)s under age 62 could benefit from 

the proposal. Limit the amount payable based on the average PIA for retired workers in 

December of the year prior to entitlement........................................................................................ -0.08 

Allow disabled widow(er)s of any age to become eligible for disabled surviving spouse 

benefits ............................................................................................................................................. 2/ 

For disabled widow(er)s, eliminate the requirement that disability must occur no later than 7 

years after the worker’s death, or after surviving spouse with child-in-care benefits were 

payable ............................................................................................................................................. 2/ 

Waive the two-year duration of divorce requirement for divorced spouse benefit eligibility, in 

cases where the worker remarries someone other than the claimant before the two-year period 

has elapsed ....................................................................................................................................... 2/ 

Provide child-care credits for up to 5 years during which the worker was living with and 

providing care for his/her own child (or spouse’s child) under the age of 7. The child-care 

credit would raise reported earnings for a qualifying year up to 25 percent of the AIME that 

would have been determined if the worker had become entitled for disabled worker benefits in 

January of the qualifying year.......................................................................................................... -0.02 

Reduce the Government Pension Offset from two-thirds to one-third of the non-covered 

government pension ......................................................................................................................... -0.02 

Beginning in 2011, eliminate the retirement earnings test for individuals aged 62 to NRA. For 

ages 62 to NRA, the exempt amounts would be specified for the earnings test as $15,000, 

$20,000, $25,000, $30,000, and $35,000, for years 2006 through 2010, respectively..................... -0.01

Subtotal, benefit provisions (including interaction) ....................................................................... -0.14 

Establish Social Security Guarantee (SSG) Accounts for all workers beginning in 2006. 

Workers would annually invest 4 percent of taxable OASDI earnings, up to $1,000 (value for 

2006 and wage-indexed thereafter). OASDI benefits would be the larger of present-law 

scheduled benefits or an annuity based on the worker’s SSG Account balance. In addition, 

workers would receive a lump sum at benefit entitlement equal to 5 percent of their SSG 

Account balance. Contributions to the SSG Accounts would be provided by the General Fund 

of the Treasury and SSG Account balances would, commencing at the worker’s entitlement, be 

gradually withdrawn and transferred to the OASDI Trust Funds..................................................... 2.49 3/ 

Total for proposal 2.35 3/ 

Notes: All estimates are based on the intermediate assumptions of the 2004 OASDI Trustees Report. 

Unless otherwise stated, benefit provisions are assumed to be effective for benefit entitlement in December 2005 or later. 

1/ Totals for individual provisions exclude interaction. 

2/ Decrease in long-range OASDI actuarial balance that is negligible (i.e., less than 0.005 percent of taxable payroll). 

3/ If SSG Accounts earn the same as the Government bond yield on Trust Fund assets (2.75 percent net of administrative expense), then the 

total change in actuarial balance for the proposal is projected to be 1.06 percent of payroll, rather than 2.35 percent of payroll, and the SSG 

Account provision by itself would be expected to increase the actuarial balance by 1.20 percent of payroll, instead of the 2.49 percent of 

payroll shown above. 

Social Security Administration 

Office of the Chief Actuary 

May 5, 2005 
Table 1--Trust Fund Operations--Shaw Proposal 

Expected SSGP Yield SSG proceeds go to estate if worker does before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real IA Yield Rate 5.20 Assumed IA Participation Rate

1 100%

Ultimate Real Annuity Yield Rate 5.20

Change in "Effective" IA Contribution Rate3

OASDI OASDI OASDI From Total IA

Cost Income Annual TFR Contribution Contribution From General Fund Contribution

Year Rate2 Rate Balance 1-1-yr Rate Rate Trust Funds of Treasury Rate

2004 11.07 12.71 1.64 306 12.40

2005 10.87 12.73 1.86 325 12.40

2006 10.90 12.74 1.84 343 12.40

2007 10.90 12.76 1.86 360 12.40 2.28 2.28

2008 10.96 12.79 1.84 377 12.40 2.28 2.28

2009 11.11 12.78 1.68 390 12.40 2.28 2.28

2010 11.24 12.81 1.57 402 12.40 2.28 2.28

2011 11.42 12.86 1.44 412 12.40 2.28 2.28

2012 11.66 12.89 1.23 420 12.40 2.28 2.28

2013 11.91 12.92 1.01 427 12.40 2.28 2.28

2014 12.14 12.94 0.79 431 12.40 2.28 2.28

2015 12.40 12.95 0.55 434 12.40 2.28 2.28

2016 12.68 12.97 0.29 434 12.40 2.28 2.28

2017 12.96 12.99 0.03 432 12.40 2.28 2.28

2018 13.25 13.01 -0.24 429 12.40 2.28 2.28

2019 13.55 13.03 -0.52 424 12.40 2.28 2.28

2020 13.85 13.05 -0.80 417 12.40 2.28 2.28

2021 14.14 13.07 -1.07 409 12.40 2.28 2.28

2022 14.41 13.09 -1.32 400 12.40 2.28 2.28

2023 14.68 13.11 -1.58 391 12.40 2.28 2.28

2024 14.94 13.13 -1.82 380 12.40 2.28 2.28

2025 15.18 13.14 -2.04 368 12.40 2.28 2.28

2026 15.40 13.16 -2.24 356 12.40 2.28 2.28

2027 15.60 13.18 -2.42 343 12.40 2.28 2.28

2028 15.77 13.19 -2.57 329 12.40 2.28 2.28

2029 15.89 13.21 -2.69 316 12.40 2.28 2.28

2030 16.00 13.22 -2.78 302 12.40 2.28 2.28

2031 16.08 13.23 -2.85 289 12.40 2.28 2.28

2032 16.14 13.24 -2.89 275 12.40 2.28 2.28

2033 16.16 13.25 -2.91 261 12.40 2.28 2.28

2034 16.15 13.26 -2.89 247 12.40 2.28 2.28

2035 16.11 13.27 -2.84 234 12.40 2.28 2.28

2036 16.04 13.27 -2.77 221 12.40 2.28 2.28

2037 15.95 13.28 -2.67 209 12.40 2.28 2.28

2038 15.83 13.28 -2.55 197 12.40 2.28 2.28

2039 15.69 13.28 -2.40 186 12.40 2.28 2.28

2040 15.53 13.28 -2.25 175 12.40 2.28 2.28

2041 15.37 13.29 -2.08 165 12.40 2.28 2.28

2042 15.20 13.29 -1.91 156 12.40 2.28 2.28

2043 15.02 13.29 -1.73 148 12.40 2.28 2.28

2044 14.83 13.29 -1.54 141 12.40 2.28 2.28

2045 14.63 13.29 -1.34 135 12.40 2.28 2.28

2046 14.42 13.29 -1.13 129 12.40 2.28 2.28

2047 14.21 13.30 -0.92 126 12.40 2.28 2.28

2048 14.00 13.30 -0.70 123 12.40 2.28 2.28

2049 13.80 13.30 -0.50 122 12.40 2.28 2.28

2050 13.60 13.30 -0.30 122 12.40 2.28 2.28

2051 13.42 13.30 -0.11 123 12.40 2.28 2.28

2052 13.24 13.31 0.07 126 12.40 2.28 2.28

2053 13.07 13.31 0.24 130 12.40 2.28 2.28

2054 12.91 13.31 0.40 136 12.40 2.28 2.28

2055 12.76 13.32 0.56 143 12.40 2.28 2.28

2056 12.61 13.32 0.71 151 12.40 2.28 2.28

2057 12.47 13.32 0.86 161 12.40 2.28 2.28

2058 12.33 13.33 1.00 173 12.40 2.28 2.28

2059 12.19 13.33 1.14 186 12.40 2.28 2.28

2060 12.06 13.34 1.28 200 12.40 2.28 2.28

2061 11.93 13.34 1.41 216 12.40 2.28 2.28

2062 11.82 13.34 1.52 233 12.40 2.28 2.28

2063 11.72 13.35 1.62 252 12.40 2.28 2.28

2064 11.63 13.35 1.72 272 12.40 2.28 2.28

2065 11.54 13.35 1.82 293 12.40 2.28 2.28

2066 11.45 13.36 1.91 316 12.40 2.28 2.28

2067 11.38 13.36 1.99 340 12.40 2.28 2.28

2068 11.30 13.36 2.06 365 12.40 2.28 2.28

2069 11.24 13.37 2.13 392 12.40 2.28 2.28

2070 11.17 13.37 2.20 419 12.40 2.28 2.28

2071 11.12 13.37 2.25 447 12.40 2.28 2.28

2072 11.08 13.37 2.30 477 12.40 2.28 2.28

2073 11.04 13.38 2.33 507 12.40 2.28 2.28

2074 11.02 13.38 2.36 537 12.40 2.28 2.28

2075 11.00 13.38 2.39 569 12.40 2.28 2.28

2076 10.98 13.39 2.40 600 12.40 2.28 2.28

2077 10.98 13.39 2.41 632 12.40 2.28 2.28

2078 10.98 13.39 2.41 665 12.40 2.28 2.28

2079 10.98 13.39 2.41 697 12.40 2.28 2.28

 Summarized OASDI

Cost Income Actuarial Change in

2004 Rate Rate Balance Actuarial Balance

-2078 13.39 13.85 0.46 2.35

Based on Intermediate Assumptions of the 2004 Trustees Report 1

Assumes that all workers will invest 4% in IAs up to $1,000 (for 2006 earnings),

 with the $1,000 threshold to be wage-indexed for years after 2006 Office of the Actuary 2

Net of Transfers from SSG Accounts to the Trust Funds. Social Security Administration 3

Reflects that contributions for a given year are assumed not to be credited until the May 5, 2005

 following year.
Table 1a--Proposal (Shaw) General Fund Transfers to SSG Accounts, OASDI Trust Fund Assets, and Theoretical OASDI Assets

Expected yield scenario SSG proceeds go to estate if worker does before entitlement Theoretical Social Security

1

with Borrowing Authority:

Contributions to SSG Accounts by General Fund Total OASDI SSG Net OASDI TF Assets at End of Year

Annual Contributions Accumulated Trust Fund Account Without GF Transfer = With GF Transfer =

Present Value % of Constant as of End Assets at Assets at Required Under Required Under

Year as of 1-1-2004 Payroll2 2004$ of Year End of Year End of Year GDP the Proposal the Proposal

(1) (2) (3) (4) (5) (6) (7) (8) (9) (Billions of $) Billions of Constant 2004$ Billions of Constant 2004 Dollars

2004 0.0 0.00 0.0 0.0 1,684 0 11,544 1,684 1,684

2005 0.0 0.00 0.0 0.0 1,840 0 11,911 1,840 1,840

2006 0.0 0.00 0.0 0.0 1,991 0 12,246 1,998 1,998

2007 99.7 2.28 113.5 113.5 2,142 116 12,562 2,156 2,270

2008 99.3 2.28 115.9 232.4 2,293 240 12,870 2,315 2,548

2009 98.8 2.28 118.4 356.8 2,441 373 13,171 2,473 2,829

2010 98.2 2.28 120.8 487.2 2,590 514 13,466 2,631 3,118

2011 97.5 2.28 123.2 623.7 2,740 664 13,752 2,790 3,414

2012 96.6 2.28 125.5 766.4 2,884 823 14,024 2,944 3,711

2013 95.6 2.28 127.6 915.3 3,021 992 14,285 3,091 4,006

2014 94.4 2.28 129.5 1,070.6 3,151 1,170 14,547 3,230 4,301

2015 93.3 2.28 131.8 1,232.9 3,273 1,358 14,804 3,360 4,593

2016 92.2 2.28 133.9 1,402.6 3,385 1,556 15,061 3,478 4,881

2017 91.0 2.28 136.1 1,579.9 3,486 1,766 15,322 3,584 5,164

2018 89.8 2.28 138.3 1,765.3 3,575 1,987 15,586 3,675 5,441

2019 88.6 2.28 140.5 1,958.7 3,650 2,219 15,842 3,750 5,708

2020 87.3 2.28 142.5 2,160.0 3,708 2,462 16,100 3,805 5,965

2021 85.9 2.28 144.6 2,369.4 3,750 2,716 16,354 3,841 6,210

2022 84.6 2.28 146.6 2,587.1 3,776 2,981 16,610 3,857 6,444

2023 83.3 2.28 148.7 2,813.4 3,784 3,257 16,861 3,851 6,664

2024 81.9 2.28 150.6 3,048.4 3,776 3,545 17,117 3,823 6,871

2025 80.6 2.28 152.6 3,292.5 3,750 3,844 17,372 3,773 7,065

2026 79.3 2.28 154.6 3,545.9 3,708 4,154 17,634 3,700 7,246

2027 78.0 2.28 156.7 3,809.0 3,651 4,476 17,903 3,604 7,413

2028 76.7 2.28 158.8 4,082.1 3,578 4,809 18,174 3,486 7,568

2029 75.5 2.28 160.9 4,365.4 3,493 5,154 18,451 3,346 7,711

2030 74.3 2.28 163.0 4,659.4 3,396 5,510 18,733 3,184 7,843

2031 73.1 2.28 165.2 4,964.4 3,289 5,877 19,022 3,000 7,965

2032 71.9 2.28 167.5 5,280.9 3,172 6,255 19,319 2,796 8,076

2033 70.8 2.28 169.8 5,609.1 3,047 6,643 19,622 2,570 8,179

2034 69.7 2.28 172.1 5,949.5 2,918 7,042 19,929 2,325 8,275

2035 68.6 2.28 174.5 6,302.5 2,784 7,451 20,243 2,062 8,364

2036 67.5 2.28 176.9 6,668.5 2,649 7,870 20,564 1,780 8,448

2037 66.5 2.28 179.4 7,047.9 2,515 8,298 20,892 1,481 8,529

2038 65.4 2.28 182.0 7,441.3 2,384 8,735 21,226 1,165 8,607

2039 64.4 2.28 184.5 7,849.1 2,258 9,179 21,562 833 8,682

2040 63.4 2.28 187.1 8,271.7 2,139 9,632 21,904 485 8,757

2041 62.4 2.28 189.8 8,709.6 2,027 10,091 22,252 120 8,830

2042 61.5 2.28 192.4 9,163.4 1,924 10,556 22,605 -262 8,901

2043 60.5 2.28 195.1 9,633.4 1,831 11,026 22,961 -662 8,971

2044 59.6 2.28 197.9 10,120.3 1,750 11,499 23,322 -1,080 9,040

2045 58.7 2.28 200.6 10,624.5 1,683 11,975 23,687 -1,516 9,108

2046 57.7 2.28 203.4 11,146.7 1,631 12,453 24,055 -1,972 9,174

2047 56.8 2.28 206.2 11,687.2 1,595 12,931 24,426 -2,449 9,239

2048 55.9 2.28 209.0 12,246.8 1,576 13,408 24,799 -2,946 9,301

2049 55.0 2.28 211.8 12,826.0 1,576 13,883 25,174 -3,465 9,361

2050 54.1 2.28 214.6 13,425.4 1,594 14,357 25,552 -4,008 9,417

2051 53.2 2.28 217.4 14,045.6 1,630 14,828 25,936 -4,577 9,469

2052 52.4 2.28 220.3 14,687.2 1,684 15,297 26,324 -5,172 9,516

2053 51.5 2.28 223.2 15,351.0 1,758 15,762 26,721 -5,795 9,556

2054 50.7 2.28 226.1 16,037.7 1,850 16,223 27,123 -6,447 9,591

2055 49.8 2.28 229.1 16,747.9 1,961 16,679 27,528 -7,130 9,618

2056 49.0 2.28 232.1 17,482.4 2,092 17,131 27,939 -7,845 9,637

2057 48.2 2.28 235.1 18,242.0 2,243 17,578 28,354 -8,594 9,648

2058 47.4 2.28 238.2 19,027.4 2,415 18,019 28,775 -9,378 9,650

2059 46.6 2.28 241.3 19,839.5 2,609 18,454 29,204 -10,196 9,643

2060 45.9 2.28 244.4 20,679.1 2,825 18,883 29,639 -11,052 9,627

2061 45.1 2.28 247.6 21,547.0 3,062 19,306 30,078 -11,946 9,601

2062 44.4 2.28 250.8 22,444.2 3,322 19,722 30,526 -12,880 9,564

2063 43.6 2.28 254.0 23,371.6 3,603 20,132 30,978 -13,857 9,515

2064 42.9 2.28 257.3 24,330.0 3,907 20,535 31,438 -14,876 9,454

2065 42.2 2.28 260.6 25,320.6 4,233 20,932 31,906 -15,940 9,380

2066 41.5 2.28 264.0 26,344.2 4,581 21,322 32,379 -17,050 9,294

2067 40.8 2.28 267.4 27,402.0 4,953 21,706 32,861 -18,208 9,195

2068 40.1 2.28 270.9 28,495.0 5,348 22,084 33,359 -19,414 9,081

2069 39.5 2.28 274.5 29,624.4 5,766 22,457 33,859 -20,670 8,954

2070 38.8 2.28 278.1 30,791.2 6,209 22,824 34,366 -21,978 8,813

2071 38.2 2.28 281.7 31,996.7 6,675 23,186 34,882 -23,340 8,657

2072 37.6 2.28 285.4 33,242.0 7,164 23,543 35,404 -24,756 8,486

2073 36.9 2.28 289.1 34,528.4 7,677 23,897 35,931 -26,230 8,299

2074 36.3 2.28 292.9 35,857.1 8,213 24,248 36,464 -27,762 8,095

2075 35.7 2.28 296.7 37,229.5 8,772 24,595 37,006 -29,356 7,873

2076 35.1 2.28 300.5 38,646.9 9,354 24,940 37,555 -31,014 7,633

2077 34.6 2.28 304.4 40,110.8 9,958 25,283 38,112 -32,736 7,375

2078 34.0 2.28 308.3 41,622.4 10,586 25,625 38,677 -34,527 7,096

2079 33.4 2.28 312.3 43,183.4 11,235 25,967 39,245 -36,387 6,796

Total, 2004-2078 4,588.1

1

Theoretical Social Security is the current Social Security program with the assumption that the law

 is modified to permit borrowing from the General Fund of the Treasury. Office of the Actuary

2

Equals percentage of previous year's taxable payroll. Social Security Administration

Based on Intermediate Assumptions of the 2004 Trustees Report. May 5, 2005
Table 1b--Unified Budget Effects of the Shaw Plan

Expected yield scenario SSG proceeds go to estate if worker does before entitlement

Transfer to Change Change in Change in 

Contributions to OASDI Other Changes in Annual Debt Held Annual

SSG by Federal Trust Funds in OASDI Unified Budget by Public Unified Budget

Government from SSGs Cash Flow Cash Flow (end of year) Balance

(1) (2) (3) (4)=(3)+(2)-(1) (5) (6)

Year (Billions of $, Present Value on 1-1-2004)

2005 0.0 0.0 0.0 0.0 0.0 0.0

2006 0.0 0.0 -5.5 -5.5 5.5 -5.5

2007 99.7 0.0 -6.5 -106.2 111.8 -106.5

2008 99.3 0.1 -6.9 -106.0 217.8 -111.8

2009 98.8 0.3 -7.0 -105.4 323.2 -116.8

2010 98.2 0.6 -7.2 -104.7 427.9 -121.8

2011 97.5 1.1 -8.2 -104.5 532.5 -127.3

2012 96.6 1.6 -8.1 -103.1 635.6 -131.6

2013 95.6 2.3 -8.0 -101.3 736.9 -135.4

2014 94.4 3.1 -7.9 -99.2 836.1 -139.0

2015 93.3 4.0 -7.7 -97.0 933.2 -142.5

2016 92.2 5.0 -7.5 -94.7 1027.9 -145.8

2017 91.0 6.2 -7.3 -92.2 1120.1 -148.9

2018 89.8 7.4 -7.2 -89.5 1209.6 -151.8

2019 88.6 8.8 -7.0 -86.8 1296.3 -154.0

2020 87.3 10.3 -6.8 -83.8 1380.1 -155.8

2021 85.9 12.0 -6.7 -80.6 1460.7 -157.3

2022 84.6 13.7 -6.6 -77.5 1538.2 -158.6

2023 83.3 15.6 -6.5 -74.2 1612.3 -159.6

2024 81.9 17.6 -6.4 -70.7 1683.1 -160.3

2025 80.6 19.7 -6.3 -67.1 1750.2 -160.7

2026 79.3 22.0 -6.1 -63.4 1813.6 -160.7

2027 78.0 24.3 -6.0 -59.7 1873.3 -160.4

2028 76.7 26.8 -5.9 -55.8 1929.1 -159.9

2029 75.5 29.4 -5.6 -51.7 1980.8 -158.9

2030 74.3 32.1 -5.3 -47.5 2028.3 -157.6

2031 73.1 34.9 -5.0 -43.2 2071.5 -155.9

2032 71.9 37.8 -4.8 -38.9 2110.3 -154.0

2033 70.8 40.9 -4.6 -34.5 2144.8 -151.8

2034 69.7 44.0 -4.4 -30.1 2174.9 -149.3

2035 68.6 47.2 -4.3 -25.6 2200.5 -146.5

2036 67.5 50.5 -4.1 -21.1 2221.6 -143.3

2037 66.5 53.9 -3.9 -16.4 2238.0 -139.9

2038 65.4 57.4 -3.7 -11.7 2249.7 -136.1

2039 64.4 61.0 -3.5 -7.0 2256.7 -132.0

2040 63.4 64.6 -3.4 -2.2 2258.9 -127.6

2041 62.4 68.3 -3.3 2.6 2256.3 -122.9

2042 61.5 72.1 -3.2 7.4 2248.8 -117.9

2043 60.5 76.0 -3.1 12.3 2236.5 -112.7

2044 59.6 79.9 -3.1 17.2 2219.4 -107.1

2045 58.7 83.8 -3.1 22.1 2197.2 -101.2

2046 57.7 87.9 -3.0 27.1 2170.1 -95.0

2047 56.8 91.9 -2.9 32.2 2137.9 -88.4

2048 55.9 95.9 -2.9 37.1 2100.9 -81.7

2049 55.0 99.6 -2.8 41.8 2059.1 -75.0

2050 54.1 103.1 -2.7 46.3 2012.8 -68.1

2051 53.2 106.5 -2.7 50.6 1962.3 -61.3

2052 52.4 109.6 -2.6 54.6 1907.6 -54.4

2053 51.5 112.6 -2.6 58.5 1849.1 -47.5

2054 50.7 115.4 -2.6 62.1 1787.0 -40.6

2055 49.8 117.9 -2.5 65.5 1721.5 -33.8

2056 49.0 120.3 -2.5 68.7 1652.8 -26.9

2057 48.2 122.4 -2.5 71.7 1581.0 -20.1

2058 47.4 124.3 -2.4 74.5 1506.5 -13.3

2059 46.6 126.1 -2.3 77.1 1429.4 -6.6

2060 45.9 127.6 -2.3 79.4 1350.0 0.0

2061 45.1 128.9 -2.2 81.6 1268.4 6.6

2062 44.4 130.0 -2.1 83.5 1184.9 13.0

2063 43.6 130.9 -2.1 85.2 1099.8 19.3

2064 42.9 131.6 -2.1 86.6 1013.2 25.5

2065 42.2 132.1 -2.0 87.8 925.3 31.5

2066 41.5 132.4 -2.0 88.9 836.5 37.4

2067 40.8 132.5 -2.0 89.7 746.8 43.2

2068 40.1 132.4 -1.9 90.3 656.4 48.8

2069 39.5 132.1 -1.9 90.8 565.6 54.3

2070 38.8 131.7 -1.8 91.1 474.6 59.6

2071 38.2 131.1 -1.8 91.2 383.4 64.8

2072 37.6 130.4 -1.8 91.1 292.4 69.8

2073 36.9 129.5 -1.7 90.8 201.5 74.6

2074 36.3 128.5 -1.7 90.5 111.1 79.3

2075 35.7 127.4 -1.7 89.9 21.1 83.8

2076 35.1 126.1 -1.7 89.3 -68.2 88.1

2077 34.6 124.8 -1.6 88.6 -156.8 92.4

2078 34.0 123.3 -1.6 87.8 -244.5 96.5

2079 33.4 121.9 -1.6 86.9 -331.4 100.5

Based on Intermediate Assumptions of the 2004 Trustees Report. Office of the Actuary

Social Security Administration

May 5, 2005
Table 1b.c--Unified Budget Effects of the Shaw Plan

Expected yield scenario SSG proceeds go to estate if worker does before entitlement

Transfer to Change Change in Change in 

Contributions to OASDI Other Changes in Annual Debt Held Annual

SSG by Federal Trust Funds in OASDI Unified Budget by Public Unified Budget

Government from SSGs Cash Flow Cash Flow (end of year) Balance

(1) (2) (3) (4)=(3)+(2)-(1) (5) (6)

Year (Billions of Constant 2004$)

2005 0.0 0.0 0.0 0.0 0.0 0.0

2006 0.0 0.0 -6.1 -6.1 6.2 -6.3

2007 113.5 0.0 -7.4 -120.9 128.8 -124.5

2008 115.9 0.1 -8.0 -123.8 257.6 -134.1

2009 118.4 0.4 -8.4 -126.3 392.4 -143.8

2010 120.8 0.8 -8.8 -128.8 533.6 -153.9

2011 123.2 1.4 -10.3 -132.1 682.2 -165.4

2012 125.5 2.1 -10.6 -133.9 836.9 -175.7

2013 127.6 3.1 -10.7 -135.3 997.4 -185.8

2014 129.5 4.3 -10.9 -136.2 1163.8 -196.2

2015 131.8 5.7 -10.9 -137.0 1336.2 -206.9

2016 133.9 7.3 -10.9 -137.5 1514.7 -217.9

2017 136.1 9.2 -10.9 -137.8 1699.3 -229.1

2018 138.3 11.5 -11.0 -137.9 1890.2 -240.5

2019 140.5 14.0 -11.1 -137.6 2086.6 -251.3

2020 142.5 16.9 -11.2 -136.8 2288.0 -261.9

2021 144.6 20.1 -11.2 -135.7 2494.4 -272.4

2022 146.6 23.8 -11.4 -134.2 2705.4 -282.9

2023 148.7 27.9 -11.6 -132.4 2920.9 -293.2

2024 150.6 32.4 -11.8 -130.0 3140.5 -303.3

2025 152.6 37.4 -11.9 -127.2 3363.8 -313.1

2026 154.6 42.9 -11.9 -123.7 3590.3 -322.5

2027 156.7 48.9 -12.0 -119.8 3819.6 -331.7

2028 158.8 55.5 -12.2 -115.5 4051.4 -340.5

2029 160.9 62.7 -11.9 -110.2 4284.8 -348.5

2030 163.0 70.5 -11.7 -104.2 4519.1 -355.9

2031 165.2 79.0 -11.4 -97.7 4753.8 -362.8

2032 167.5 88.1 -11.2 -90.5 4988.3 -369.0

2033 169.8 98.0 -11.0 -82.7 5221.9 -374.6

2034 172.1 108.7 -10.9 -74.3 5454.0 -379.5

2035 174.5 120.2 -10.8 -65.2 5683.8 -383.6

2036 176.9 132.5 -10.7 -55.2 5910.3 -386.6

2037 179.4 145.6 -10.6 -44.4 6132.6 -388.6

2038 182.0 159.7 -10.4 -32.6 6349.7 -389.5

2039 184.5 174.7 -10.1 -20.0 6560.5 -389.0

2040 187.1 190.7 -10.0 -6.4 6763.8 -387.4

2041 189.8 207.7 -9.9 8.0 6958.6 -384.3

2042 192.4 225.7 -10.0 23.3 7143.8 -379.9

2043 195.1 244.9 -10.1 39.6 7317.9 -373.8

2044 197.9 265.2 -10.3 57.0 7479.5 -366.0

2045 200.6 286.7 -10.5 75.6 7627.2 -356.2

2046 203.4 309.5 -10.6 95.5 7759.0 -344.3

2047 206.2 333.6 -10.7 116.8 7873.3 -330.1

2048 209.0 358.3 -10.7 138.5 7968.9 -314.4

2049 211.8 383.4 -10.8 160.8 8044.7 -297.0

2050 214.6 408.9 -10.8 183.5 8099.8 -278.0

2051 217.4 434.9 -10.9 206.5 8133.2 -257.5

2052 220.3 461.2 -11.1 229.8 8144.0 -235.5

2053 223.2 487.9 -11.3 253.4 8131.1 -211.8

2054 226.1 514.8 -11.5 277.2 8093.7 -186.6

2055 229.1 542.0 -11.7 301.2 8030.8 -159.8

2056 232.1 569.3 -11.9 325.4 7941.5 -131.2

2057 235.1 596.9 -12.0 349.8 7824.8 -101.0

2058 238.2 624.5 -12.0 374.3 7679.6 -68.9

2059 241.3 652.1 -12.0 398.9 7505.2 -35.3

2060 244.4 679.8 -12.0 423.4 7300.7 0.1

2061 247.6 707.3 -12.0 447.7 7065.4 37.0

2062 250.8 734.8 -12.1 471.9 6798.4 75.6

2063 254.0 762.0 -12.2 495.8 6499.1 115.7

2064 257.3 789.1 -12.4 519.4 6166.9 157.3

2065 260.6 815.8 -12.6 542.5 5801.3 200.4

2066 264.0 842.2 -12.8 565.4 5401.6 245.1

2067 267.4 868.2 -12.9 587.9 4967.0 291.4

2068 270.9 893.7 -13.0 609.8 4497.1 339.3

2069 274.5 918.8 -13.0 631.3 3991.4 388.6

2070 278.1 943.3 -13.0 652.2 3449.2 439.5

2071 281.7 967.3 -13.2 672.4 2870.3 491.7

2072 285.4 990.6 -13.3 691.9 2254.2 545.4

2073 289.1 1013.4 -13.5 710.8 1600.5 600.6

2074 292.9 1035.7 -13.7 729.0 908.6 657.3

2075 296.7 1057.3 -13.9 746.7 178.0 715.6

2076 300.5 1078.4 -14.1 763.7 -591.7 775.5

2077 304.4 1098.9 -14.3 780.2 -1401.3 837.1

2078 308.3 1119.0 -14.4 796.2 -2251.4 900.6

2079 312.3 1138.6 -14.6 811.7 -3142.7 965.8

Based on Intermediate Assumptions of the 2004 Trustees Report. Office of the Actuary

Social Security Administration

May 5, 2005
Expected yield scenario SSG proceeds go to estate if worker does before entitlement

Estimate for Modified Present Law

Estimate for Proposal Theoretical Social Security with PAYGO Transfers

Net Amount of Cash Flow from the OASDI Net Amount of Cash Flow from the OASDI

Trust Funds to the General Fund of the Trust Funds to the General Fund of the

Treasury During the Year1 Treasury During the Year1

Percent Billions of Dollars Percent Billions of Dollars

Year of payroll Current $ 1/1/2004 PV Constant 2004$ of payroll Current $ 1/1/2004 PV Constant 2004$

2004 1.6 65 63 65 1.6 65 63 65

2005 1.9 89 82 87 1.9 89 82 87

2006 1.8 91 79 88 2.0 97 85 94

2007 1.9 97 80 92 2.0 105 87 99

2008 1.8 100 79 92 2.0 109 86 100

2009 1.7 96 71 85 1.8 105 78 93

2010 1.6 94 66 81 1.7 103 73 89

2011 1.4 90 60 76 1.6 101 67 85

2012 1.2 81 51 67 1.4 91 58 75

2013 1.0 69 41 55 1.2 79 47 63

2014 0.8 56 32 44 0.9 65 37 50

2015 0.6 41 22 31 0.6 48 25 36

2016 0.3 22 11 16 0.4 27 14 20

2017 0.0 2 1 1 0.1 4 2 3

2018 -0.2 -21 -10 -15 -0.2 -22 -10 -15

2019 -0.5 -47 -20 -32 -0.6 -51 -22 -35

2020 -0.8 -75 -30 -50 -0.9 -84 -34 -55

2021 -1.1 -105 -40 -67 -1.2 -119 -45 -76

2022 -1.3 -135 -49 -84 -1.5 -155 -56 -97

2023 -1.6 -168 -57 -102 -1.8 -195 -66 -118

2024 -1.8 -201 -64 -118 -2.1 -236 -76 -139

2025 -2.0 -235 -71 -135 -2.4 -279 -85 -160

2026 -2.2 -269 -77 -150 -2.7 -324 -93 -181

2027 -2.4 -302 -82 -164 -3.0 -370 -100 -201

2028 -2.6 -335 -85 -177 -3.2 -416 -106 -220

2029 -2.7 -364 -88 -187 -3.4 -463 -112 -238

2030 -2.8 -392 -89 -196 -3.6 -510 -116 -255

2031 -2.8 -419 -90 -204 -3.8 -558 -120 -271

2032 -2.9 -443 -90 -210 -4.0 -606 -123 -287

2033 -2.9 -464 -89 -213 -4.1 -653 -125 -300

2034 -2.9 -481 -87 -215 -4.2 -699 -127 -313

2035 -2.8 -493 -84 -215 -4.3 -744 -127 -324

2036 -2.8 -501 -81 -212 -4.4 -788 -127 -334

2037 -2.7 -504 -77 -207 -4.4 -831 -127 -343

2038 -2.5 -501 -72 -201 -4.4 -873 -126 -350

2039 -2.4 -492 -67 -192 -4.5 -915 -124 -357

2040 -2.2 -480 -62 -182 -4.5 -956 -123 -363

2041 -2.1 -464 -56 -171 -4.5 -1,000 -121 -369

2042 -1.9 -444 -51 -159 -4.5 -1,045 -120 -375

2043 -1.7 -419 -45 -146 -4.5 -1,091 -118 -381

2044 -1.5 -388 -40 -132 -4.5 -1,139 -116 -387

2045 -1.3 -353 -34 -116 -4.5 -1,189 -115 -393

2046 -1.1 -311 -28 -100 -4.5 -1,241 -113 -399

2047 -0.9 -263 -23 -82 -4.6 -1,297 -112 -405

2048 -0.7 -212 -17 -64 -4.6 -1,355 -110 -412

2049 -0.5 -157 -12 -46 -4.6 -1,417 -109 -419

2050 -0.3 -100 -7 -29 -4.6 -1,483 -108 -427

2051 -0.1 -41 -3 -11 -4.6 -1,555 -107 -435

2052 0.1 20 1 5 -4.7 -1,634 -106 -445

2053 0.2 83 5 22 -4.7 -1,717 -105 -455

2054 0.4 149 9 38 -4.8 -1,805 -104 -465

2055 0.6 217 12 54 -4.8 -1,899 -104 -476

2056 0.7 288 15 70 -4.9 -1,999 -103 -487

2057 0.9 362 18 86 -4.9 -2,104 -102 -499

2058 1.0 441 20 102 -5.0 -2,214 -102 -511

2059 1.1 525 23 118 -5.0 -2,328 -101 -522

2060 1.3 612 25 134 -5.1 -2,447 -100 -534

2061 1.4 701 27 149 -5.1 -2,574 -100 -547

2062 1.5 789 29 163 -5.2 -2,709 -99 -560

2063 1.6 878 30 176 -5.2 -2,854 -98 -574

2064 1.7 971 32 190 -5.3 -3,003 -98 -587

2065 1.8 1,068 33 203 -5.3 -3,157 -97 -600

2066 1.9 1,165 34 216 -5.4 -3,319 -96 -614

2067 2.0 1,265 35 228 -5.4 -3,489 -96 -628

2068 2.1 1,368 35 239 -5.5 -3,665 -95 -641

2069 2.1 1,473 36 251 -5.5 -3,847 -94 -655

2070 2.2 1,581 37 262 -5.6 -4,037 -93 -669

2071 2.2 1,687 37 272 -5.6 -4,235 -92 -682

2072 2.3 1,794 37 281 -5.7 -4,442 -92 -696

2073 2.3 1,899 37 290 -5.7 -4,660 -91 -710

2074 2.4 2,003 37 297 -5.7 -4,888 -90 -725

2075 2.4 2,106 37 304 -5.8 -5,127 -89 -740

2076 2.4 2,206 36 310 -5.8 -5,377 -88 -755

2077 2.4 2,305 36 315 -5.9 -5,640 -87 -770

2078 2.4 2,403 35 319 -5.9 -5,915 -87 -785

Total, 2004-78 -392 -5,225

Office of the Actuary 1

Trust Funds are assumed to borrow from the General Fund of the Treasury. Social Security Administration

May 5, 2005

Table 1c--OASDI Cash Flow to General Fund--Proposal vs Theoretical OASDI
Table 1d--Change in Long-Range Trust Fund Assets/Unfunded Obligation for the Shaw Plan

Expected yield scenario SSG proceeds go to estate if worker does before entitlement

Present-Law OASDI

Trust Fund Assets Basic Transfer to Proposal OASDI

or If Negative, Changes OASDI Total Change Trust Fund Assets /

Unfunded Obligation in OASDI Trust Funds Through Unfunded Obligation

Year Through EOY1 Cash Flow from SSGs End of Year2 Through EOY

(1) (2) (3) (4) (5)

(In Billions of $, Present Value as of 1-1-04)

2005 1,674.6 0.0 0.0 0.0 1,674.6

2006 1,759.0 -5.5 0.0 -5.5 1,753.5

2007 1,845.5 -6.5 0.0 -12.0 1,833.5

2008 1,930.8 -6.9 0.1 -18.8 1,912.0

2009 2,008.4 -7.0 0.3 -25.5 1,983.0

2010 2,080.8 -7.2 0.6 -32.0 2,048.8

2011 2,148.0 -8.2 1.1 -39.0 2,109.0

2012 2,205.6 -8.1 1.6 -45.5 2,160.1

2013 2,252.4 -8.0 2.3 -51.3 2,201.2

2014 2,289.0 -7.9 3.1 -56.1 2,232.9

2015 2,314.3 -7.7 4.0 -59.8 2,254.5

2016 2,327.9 -7.5 5.0 -62.3 2,265.7

2017 2,329.7 -7.3 6.2 -63.4 2,266.3

2018 2,319.7 -7.2 7.4 -63.1 2,256.5

2019 2,297.6 -7.0 8.8 -61.3 2,236.3

2020 2,263.7 -6.8 10.3 -57.8 2,205.9

2021 2,218.5 -6.7 12.0 -52.5 2,165.9

2022 2,162.6 -6.6 13.7 -45.4 2,117.2

2023 2,096.4 -6.5 15.6 -36.2 2,060.2

2024 2,020.7 -6.4 17.6 -25.0 1,995.7

2025 1,936.1 -6.3 19.7 -11.6 1,924.5

2026 1,843.3 -6.1 22.0 4.3 1,847.6

2027 1,743.3 -6.0 24.3 22.6 1,765.9

2028 1,637.0 -5.9 26.8 43.5 1,680.5

2029 1,525.4 -5.6 29.4 67.3 1,592.8

2030 1,409.4 -5.3 32.1 94.1 1,503.5

2031 1,289.5 -5.0 34.9 124.0 1,413.5

2032 1,166.5 -4.8 37.8 157.0 1,323.5

2033 1,041.2 -4.6 40.9 193.3 1,234.5

2034 914.6 -4.4 44.0 232.9 1,147.5

2035 787.2 -4.3 47.2 275.9 1,063.1

2036 659.9 -4.1 50.5 322.3 982.2

2037 533.0 -3.9 53.9 372.3 905.3

2038 407.2 -3.7 57.4 426.0 833.2

2039 282.7 -3.5 61.0 483.5 766.2

2040 159.8 -3.4 64.6 544.7 704.5

2041 38.4 -3.3 68.3 609.8 648.2

2042 -81.4 -3.2 72.1 678.7 597.3

2043 -199.5 -3.1 76.0 751.5 552.0

2044 -316.0 -3.1 79.9 828.3 512.3

2045 -430.8 -3.1 83.8 909.1 478.2

2046 -544.1 -3.0 87.9 993.9 449.8

2047 -655.8 -2.9 91.9 1,082.9 427.1

2048 -766.0 -2.9 95.9 1,175.9 409.9

2049 -874.8 -2.8 99.6 1,272.7 397.9

2050 -982.4 -2.7 103.1 1,373.1 390.7

2051 -1,089.0 -2.7 106.5 1,476.9 387.9

2052 -1,194.8 -2.6 109.6 1,583.9 389.1

2053 -1,299.7 -2.6 112.6 1,693.9 394.2

2054 -1,403.9 -2.6 115.4 1,806.7 402.8

2055 -1,507.4 -2.5 117.9 1,922.0 414.6

2056 -1,610.3 -2.5 120.3 2,039.8 429.4

2057 -1,712.7 -2.5 122.4 2,159.7 447.1

2058 -1,814.4 -2.4 124.3 2,281.7 467.3

2059 -1,915.3 -2.3 126.1 2,405.4 490.1

2060 -2,015.6 -2.3 127.6 2,530.7 515.1

2061 -2,115.1 -2.2 128.9 2,657.4 542.2

2062 -2,214.1 -2.1 130.0 2,785.2 571.1

2063 -2,312.6 -2.1 130.9 2,914.0 601.4

2064 -2,410.5 -2.1 131.6 3,043.5 633.0

2065 -2,507.7 -2.0 132.1 3,173.5 665.9

2066 -2,604.1 -2.0 132.4 3,303.9 699.8

2067 -2,699.9 -2.0 132.5 3,434.4 734.5

2068 -2,794.9 -1.9 132.4 3,564.9 769.9

2069 -2,889.1 -1.9 132.1 3,695.1 806.0

2070 -2,982.5 -1.8 131.7 3,825.0 842.6

2071 -3,075.0 -1.8 131.1 3,954.4 879.4

2072 -3,166.6 -1.8 130.4 4,083.0 916.4

2073 -3,257.4 -1.7 129.5 4,210.8 953.4

2074 -3,347.3 -1.7 128.5 4,337.6 990.3

2075 -3,436.4 -1.7 127.4 4,463.3 1,026.9

2076 -3,524.7 -1.7 126.1 4,587.7 1,063.1

2077 -3,612.1 -1.6 124.8 4,710.9 1,098.8

2078 -3,698.7 -1.6 123.3 4,832.6 1,134.0

Total, 2004-78 -300.6 5,133.3

Based on Intermediate Assumptions of the 2004 Trustees Report. Office of the Actuary 1

Negative amounts represented unfunded obligation through the end of the year. Social Security Administration 2

Total change equals total change from the prior year + Column(2) + Column(3). May 5, 2005
Table 2--Trust Fund Operations--Shaw Proposal 

Sensitivity=government bond yield SSG proceeds go to estate if worker does before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real IA Yield Rate 2.75 Assumed IA Participation Rate

1 100%

Ultimate Real Annuity Yield Rate 2.75

Change in "Effective" IA Contribution Rate3

OASDI OASDI OASDI From Total IA

Cost Income Annual TFR Contribution Contribution From General Fund Contribution

Year Rate2 Rate Balance 1-1-yr Rate Rate Trust Funds of Treasury Rate

2004 11.07 12.71 1.64 306 12.40

2005 10.87 12.73 1.86 325 12.40

2006 10.90 12.74 1.84 343 12.40

2007 10.90 12.76 1.86 360 12.40 2.28 2.28

2008 10.96 12.79 1.84 377 12.40 2.28 2.28

2009 11.11 12.78 1.68 390 12.40 2.28 2.28

2010 11.24 12.81 1.57 402 12.40 2.28 2.28

2011 11.42 12.86 1.44 412 12.40 2.28 2.28

2012 11.66 12.89 1.23 420 12.40 2.28 2.28

2013 11.91 12.92 1.01 427 12.40 2.28 2.28

2014 12.15 12.94 0.78 431 12.40 2.28 2.28

2015 12.42 12.95 0.54 433 12.40 2.28 2.28

2016 12.70 12.97 0.28 433 12.40 2.28 2.28

2017 12.99 12.99 0.01 431 12.40 2.28 2.28

2018 13.28 13.01 -0.27 427 12.40 2.28 2.28

2019 13.59 13.03 -0.56 422 12.40 2.28 2.28

2020 13.90 13.05 -0.85 414 12.40 2.28 2.28

2021 14.20 13.07 -1.13 406 12.40 2.28 2.28

2022 14.49 13.09 -1.41 396 12.40 2.28 2.28

2023 14.79 13.11 -1.68 385 12.40 2.28 2.28

2024 15.06 13.13 -1.94 374 12.40 2.28 2.28

2025 15.33 13.14 -2.18 361 12.40 2.28 2.28

2026 15.57 13.16 -2.41 347 12.40 2.28 2.28

2027 15.80 13.18 -2.62 332 12.40 2.28 2.28

2028 16.00 13.19 -2.81 317 12.40 2.28 2.28

2029 16.17 13.21 -2.96 302 12.40 2.28 2.28

2030 16.31 13.22 -3.09 286 12.40 2.28 2.28

2031 16.44 13.23 -3.21 270 12.40 2.28 2.28

2032 16.54 13.24 -3.30 253 12.40 2.28 2.28

2033 16.62 13.25 -3.37 237 12.40 2.28 2.28

2034 16.67 13.26 -3.41 220 12.40 2.28 2.28

2035 16.70 13.27 -3.43 202 12.40 2.28 2.28

2036 16.70 13.27 -3.42 185 12.40 2.28 2.28

2037 16.68 13.28 -3.40 168 12.40 2.28 2.28

2038 16.63 13.28 -3.35 151 12.40 2.28 2.28

2039 16.58 13.28 -3.29 134 12.40 2.28 2.28

2040 16.51 13.28 -3.23 117 12.40 2.28 2.28

2041 16.44 13.29 -3.16 100 12.40 2.28 2.28

2042 16.38 13.29 -3.09 82 12.40 2.28 2.28

2043 16.30 13.29 -3.01 65 12.40 2.28 2.28

2044 16.23 13.29 -2.94 48 12.40 2.28 2.28

2045 16.15 13.29 -2.86 31 12.40 2.28 2.28

2046 16.08 13.29 -2.78 14 12.40 2.28 2.28

2047 16.00 13.30 -2.71 -- 12.40 2.28 2.28

2048 15.93 13.30 -2.63 -- 12.40 2.28 2.28

2049 15.86 13.30 -2.56 -- 12.40 2.28 2.28

2050 15.81 13.30 -2.51 -- 12.40 2.28 2.28

2051 15.76 13.30 -2.46 -- 12.40 2.28 2.28

2052 15.73 13.31 -2.42 -- 12.40 2.28 2.28

2053 15.70 13.31 -2.39 -- 12.40 2.28 2.28

2054 15.68 13.31 -2.37 -- 12.40 2.28 2.28

2055 15.66 13.32 -2.35 -- 12.40 2.28 2.28

2056 15.65 13.32 -2.33 -- 12.40 2.28 2.28

2057 15.65 13.32 -2.32 -- 12.40 2.28 2.28

2058 15.64 13.33 -2.32 -- 12.40 2.28 2.28

2059 15.64 13.33 -2.30 -- 12.40 2.28 2.28

2060 15.63 13.34 -2.30 -- 12.40 2.28 2.28

2061 15.64 13.34 -2.30 -- 12.40 2.28 2.28

2062 15.65 13.34 -2.30 -- 12.40 2.28 2.28

2063 15.67 13.35 -2.32 -- 12.40 2.28 2.28

2064 15.68 13.35 -2.33 -- 12.40 2.28 2.28

2065 15.70 13.35 -2.34 -- 12.40 2.28 2.28

2066 15.72 13.36 -2.36 -- 12.40 2.28 2.28

2067 15.74 13.36 -2.38 -- 12.40 2.28 2.28

2068 15.76 13.36 -2.39 -- 12.40 2.28 2.28

2069 15.78 13.37 -2.41 -- 12.40 2.28 2.28

2070 15.79 13.37 -2.42 -- 12.40 2.28 2.28

2071 15.82 13.37 -2.44 -- 12.40 2.28 2.28

2072 15.84 13.37 -2.46 -- 12.40 2.28 2.28

2073 15.87 13.38 -2.49 -- 12.40 2.28 2.28

2074 15.89 13.38 -2.51 -- 12.40 2.28 2.28

2075 15.93 13.38 -2.54 -- 12.40 2.28 2.28

2076 15.96 13.39 -2.57 -- 12.40 2.28 2.28

2077 15.99 13.39 -2.60 -- 12.40 2.28 2.28

2078 16.03 13.39 -2.64 -- 12.40 2.28 2.28

2079 16.06 13.39 -2.67 -- 12.40 2.28 2.28

 Summarized OASDI

Cost Income Actuarial Change in

2004 Rate Rate Balance Actuarial Balance

-2078 14.67 13.85 -0.83 1.06

Based on Intermediate Assumptions of the 2004 Trustees Report 1

Assumes that all workers will invest 4% in IAs up to $1,000 (for 2006 earnings),

 with the $1,000 threshold to be wage-indexed for years after 2006. Office of the Actuary 2

Net of Transfers from SSG Accounts to the Trust Funds Social Security Administration 3

Reflects that contributions for a given year are assumed not to be credited until the May 5, 2005

 following year.
Table 2a--Proposal (Shaw) General Fund Transfers to SSG Accounts, OASDI Trust Fund Assets, and Theoretical OASDI Assets

Sensitivity=government bond yield SSG proceeds go to estate if worker does before entitlement Theoretical Social Security1

with Borrowing Authority:

Contributions to SSG Accounts by General Fund Total OASDI SSG Net OASDI TF Assets at End of Year

Annual Contributions Accumulated Trust Fund Account Without GF Transfer = With GF Transfer =

Present Value % of Constant as of End Assets at Assets at Required Under Required Under

Year as of 1-1-2004 Payroll2 2004$ of Year End of Year End of Year GDP the Proposal the Proposal

(1) (2) (3) (4) (5) (6) (7) (8) (9) (Billions of $) Billions of Constant 2004$ Billions of Constant 2004 Dollars

2004 0.0 0.00 0.0 0.0 1,684 0 11,544 1,684 1,684

2005 0.0 0.00 0.0 0.0 1,840 0 11,911 1,840 1,840

2006 0.0 0.00 0.0 0.0 1,991 0 12,246 1,998 1,998

2007 99.7 2.28 113.5 113.5 2,142 115 12,562 2,156 2,270

2008 99.3 2.28 115.9 232.4 2,293 235 12,870 2,315 2,548

2009 98.8 2.28 118.4 356.8 2,441 360 13,171 2,473 2,829

2010 98.2 2.28 120.8 487.2 2,590 490 13,466 2,631 3,118

2011 97.5 2.28 123.2 623.7 2,739 626 13,752 2,790 3,414

2012 96.6 2.28 125.5 766.4 2,883 766 14,024 2,944 3,711

2013 95.6 2.28 127.6 915.3 3,020 912 14,285 3,091 4,006

2014 94.4 2.28 129.5 1,070.6 3,150 1,063 14,547 3,230 4,301

2015 93.3 2.28 131.8 1,232.9 3,271 1,219 14,804 3,360 4,593

2016 92.2 2.28 133.9 1,402.6 3,382 1,380 15,061 3,478 4,881

2017 91.0 2.28 136.1 1,579.9 3,482 1,547 15,322 3,584 5,164

2018 89.8 2.28 138.3 1,765.3 3,569 1,719 15,586 3,675 5,441

2019 88.6 2.28 140.5 1,958.7 3,640 1,896 15,842 3,750 5,708

2020 87.3 2.28 142.5 2,160.0 3,695 2,078 16,100 3,805 5,965

2021 85.9 2.28 144.6 2,369.4 3,732 2,264 16,354 3,841 6,210

2022 84.6 2.28 146.6 2,587.1 3,752 2,454 16,610 3,857 6,444

2023 83.3 2.28 148.7 2,813.4 3,753 2,649 16,861 3,851 6,664

2024 81.9 2.28 150.6 3,048.4 3,736 2,847 17,117 3,823 6,871

2025 80.6 2.28 152.6 3,292.5 3,699 3,049 17,372 3,773 7,065

2026 79.3 2.28 154.6 3,545.9 3,644 3,255 17,634 3,700 7,246

2027 78.0 2.28 156.7 3,809.0 3,571 3,465 17,903 3,604 7,413

2028 76.7 2.28 158.8 4,082.1 3,479 3,677 18,174 3,486 7,568

2029 75.5 2.28 160.9 4,365.4 3,372 3,893 18,451 3,346 7,711

2030 74.3 2.28 163.0 4,659.4 3,249 4,111 18,733 3,184 7,843

2031 73.1 2.28 165.2 4,964.4 3,110 4,332 19,022 3,000 7,965

2032 71.9 2.28 167.5 5,280.9 2,957 4,555 19,319 2,796 8,076

2033 70.8 2.28 169.8 5,609.1 2,792 4,781 19,622 2,570 8,179

2034 69.7 2.28 172.1 5,949.5 2,614 5,009 19,929 2,325 8,275

2035 68.6 2.28 174.5 6,302.5 2,427 5,238 20,243 2,062 8,364

2036 67.5 2.28 176.9 6,668.5 2,230 5,469 20,564 1,780 8,448

2037 66.5 2.28 179.4 7,047.9 2,025 5,701 20,892 1,481 8,529

2038 65.4 2.28 182.0 7,441.3 1,814 5,934 21,226 1,165 8,607

2039 64.4 2.28 184.5 7,849.1 1,598 6,168 21,562 833 8,682

2040 63.4 2.28 187.1 8,271.7 1,378 6,401 21,904 485 8,757

2041 62.4 2.28 189.8 8,709.6 1,152 6,635 22,252 120 8,830

2042 61.5 2.28 192.4 9,163.4 922 6,869 22,605 -262 8,901

2043 60.5 2.28 195.1 9,633.4 688 7,102 22,961 -662 8,971

2044 59.6 2.28 197.9 10,120.3 450 7,333 23,322 -1,080 9,040

2045 58.7 2.28 200.6 10,624.5 208 7,563 23,687 -1,516 9,108

2046 57.7 2.28 203.4 11,146.7 -38 7,792 24,055 -1,972 9,174

2047 56.8 2.28 206.2 11,687.2 -287 8,018 24,426 -2,449 9,239

2048 55.9 2.28 209.0 12,246.8 -540 8,241 24,799 -2,946 9,301

2049 55.0 2.28 211.8 12,826.0 -798 8,462 25,174 -3,465 9,361

2050 54.1 2.28 214.6 13,425.4 -1,062 8,680 25,552 -4,008 9,417

2051 53.2 2.28 217.4 14,045.6 -1,331 8,896 25,936 -4,577 9,469

2052 52.4 2.28 220.3 14,687.2 -1,609 9,109 26,324 -5,172 9,516

2053 51.5 2.28 223.2 15,351.0 -1,894 9,319 26,721 -5,795 9,556

2054 50.7 2.28 226.1 16,037.7 -2,189 9,527 27,123 -6,447 9,591

2055 49.8 2.28 229.1 16,747.9 -2,494 9,732 27,528 -7,130 9,618

2056 49.0 2.28 232.1 17,482.4 -2,810 9,934 27,939 -7,845 9,637

2057 48.2 2.28 235.1 18,242.0 -3,138 10,134 28,354 -8,594 9,648

2058 47.4 2.28 238.2 19,027.4 -3,477 10,331 28,775 -9,378 9,650

2059 46.6 2.28 241.3 19,839.5 -3,829 10,526 29,204 -10,196 9,643

2060 45.9 2.28 244.4 20,679.1 -4,194 10,719 29,639 -11,052 9,627

2061 45.1 2.28 247.6 21,547.0 -4,573 10,910 30,078 -11,946 9,601

2062 44.4 2.28 250.8 22,444.2 -4,967 11,098 30,526 -12,880 9,564

2063 43.6 2.28 254.0 23,371.6 -5,379 11,285 30,978 -13,857 9,515

2064 42.9 2.28 257.3 24,330.0 -5,807 11,470 31,438 -14,876 9,454

2065 42.2 2.28 260.6 25,320.6 -6,253 11,653 31,906 -15,940 9,380

2066 41.5 2.28 264.0 26,344.2 -6,718 11,835 32,379 -17,050 9,294

2067 40.8 2.28 267.4 27,402.0 -7,203 12,016 32,861 -18,208 9,195

2068 40.1 2.28 270.9 28,495.0 -7,707 12,196 33,359 -19,414 9,081

2069 39.5 2.28 274.5 29,624.4 -8,233 12,375 33,859 -20,670 8,954

2070 38.8 2.28 278.1 30,791.2 -8,780 12,554 34,366 -21,978 8,813

2071 38.2 2.28 281.7 31,996.7 -9,350 12,732 34,882 -23,340 8,657

2072 37.6 2.28 285.4 33,242.0 -9,943 12,910 35,404 -24,756 8,486

2073 36.9 2.28 289.1 34,528.4 -10,562 13,089 35,931 -26,230 8,299

2074 36.3 2.28 292.9 35,857.1 -11,206 13,267 36,464 -27,762 8,095

2075 35.7 2.28 296.7 37,229.5 -11,878 13,446 37,006 -29,356 7,873

2076 35.1 2.28 300.5 38,646.9 -12,578 13,626 37,555 -31,014 7,633

2077 34.6 2.28 304.4 40,110.8 -13,308 13,806 38,112 -32,736 7,375

2078 34.0 2.28 308.3 41,622.4 -14,069 13,988 38,677 -34,527 7,096

2079 33.4 2.28 312.3 43,183.4 -14,862 14,171 39,245 -36,387 6,796

Total, 2004-2078 4,588.1

1

Theoretical Social Security is the current Social Security program with the assumption that the law

 is modified to permit borrowing from the General Fund of the Treasury Office of the Actuary 2

Equals percentage of previous year's taxable payroll. Social Security Administration

Based on Intermediate Assumptions of the 2004 Trustees Report May 5, 2005
Table 2b--Unified Budget Effects of the Shaw Plan

Sensitivity=government bond yield SSG proceeds go to estate if worker does before entitlement

Transfer to Change Change in Change in 

Contributions to OASDI Other Changes in Annual Debt Held Annual

SSG by Federal Trust Funds in OASDI Unified Budget by Public Unified Budget

Government from SSGs Cash Flow Cash Flow (end of year) Balance

(1) (2) (3) (4)=(3)+(2)-(1) (5) (6)

Year (Billions of $, Present Value on 1-1-2004)

2005 0.0 0.0 0.0 0.0 0.0 0.0

2006 0.0 0.0 -5.5 -5.5 5.5 -5.5

2007 99.7 0.0 -6.5 -106.2 111.8 -106.5

2008 99.3 0.1 -6.9 -106.0 217.8 -111.8

2009 98.8 0.3 -7.0 -105.4 323.2 -116.9

2010 98.2 0.6 -7.2 -104.7 428.0 -121.8

2011 97.5 1.0 -8.2 -104.6 532.6 -127.4

2012 96.6 1.5 -8.1 -103.3 635.9 -131.8

2013 95.6 2.1 -8.0 -101.5 737.4 -135.7

2014 94.4 2.8 -7.9 -99.6 837.0 -139.4

2015 93.3 3.5 -7.7 -97.5 934.5 -143.1

2016 92.2 4.3 -7.5 -95.4 1029.9 -146.6

2017 91.0 5.2 -7.3 -93.1 1123.0 -150.0

2018 89.8 6.2 -7.2 -90.8 1213.8 -153.2

2019 88.6 7.2 -7.0 -88.3 1302.2 -155.8

2020 87.3 8.4 -6.8 -85.7 1387.9 -158.1

2021 85.9 9.5 -6.7 -83.1 1471.0 -160.2

2022 84.6 10.7 -6.6 -80.4 1551.4 -162.2

2023 83.3 12.0 -6.5 -77.8 1629.2 -164.0

2024 81.9 13.3 -6.4 -75.0 1704.2 -165.5

2025 80.6 14.7 -6.3 -72.2 1776.4 -166.9

2026 79.3 16.1 -6.1 -69.3 1845.7 -168.0

2027 78.0 17.5 -6.0 -66.4 1912.1 -169.0

2028 76.7 19.0 -5.9 -63.6 1975.7 -169.8

2029 75.5 20.5 -5.6 -60.6 2036.2 -170.4

2030 74.3 22.1 -5.3 -57.5 2093.8 -170.7

2031 73.1 23.6 -5.0 -54.5 2148.3 -170.9

2032 71.9 25.2 -4.8 -51.5 2199.8 -170.9

2033 70.8 26.8 -4.6 -48.6 2248.4 -170.8

2034 69.7 28.3 -4.4 -45.7 2294.2 -170.7

2035 68.6 29.9 -4.3 -42.9 2337.1 -170.4

2036 67.5 31.5 -4.1 -40.1 2377.1 -169.9

2037 66.5 33.1 -3.9 -37.3 2414.4 -169.4

2038 65.4 34.7 -3.7 -34.5 2448.9 -168.6

2039 64.4 36.2 -3.5 -31.7 2480.6 -167.8

2040 63.4 37.8 -3.4 -29.0 2509.6 -166.9

2041 62.4 39.3 -3.3 -26.4 2536.0 -165.8

2042 61.5 40.9 -3.2 -23.8 2559.8 -164.7

2043 60.5 42.4 -3.1 -21.3 2581.1 -163.6

2044 59.6 43.8 -3.1 -18.8 2599.9 -162.3

2045 58.7 45.3 -3.1 -16.4 2616.3 -160.9

2046 57.7 46.7 -3.0 -14.0 2630.3 -159.4

2047 56.8 48.1 -2.9 -11.6 2642.0 -157.8

2048 55.9 49.4 -2.9 -9.3 2651.3 -156.2

2049 55.0 50.6 -2.8 -7.2 2658.5 -154.5

2050 54.1 51.7 -2.7 -5.2 2663.7 -152.9

2051 53.2 52.7 -2.7 -3.3 2666.9 -151.3

2052 52.4 53.5 -2.6 -1.5 2668.4 -149.7

2053 51.5 54.3 -2.6 0.2 2668.2 -148.1

2054 50.7 54.9 -2.6 1.7 2666.6 -146.6

2055 49.8 55.5 -2.5 3.1 2663.5 -145.1

2056 49.0 55.9 -2.5 4.4 2659.1 -143.6

2057 48.2 56.3 -2.5 5.6 2653.4 -142.1

2058 47.4 56.6 -2.4 6.8 2646.6 -140.7

2059 46.6 56.8 -2.3 7.8 2638.8 -139.2

2060 45.9 56.9 -2.3 8.8 2630.0 -137.8

2061 45.1 57.0 -2.2 9.7 2620.3 -136.5

2062 44.4 56.9 -2.1 10.4 2609.9 -135.2

2063 43.6 56.8 -2.1 11.1 2598.8 -133.9

2064 42.9 56.6 -2.1 11.7 2587.1 -132.7

2065 42.2 56.4 -2.0 12.2 2574.9 -131.6

2066 41.5 56.1 -2.0 12.6 2562.3 -130.5

2067 40.8 55.8 -2.0 13.0 2549.3 -129.4

2068 40.1 55.4 -1.9 13.3 2536.0 -128.3

2069 39.5 54.9 -1.9 13.6 2522.4 -127.3

2070 38.8 54.4 -1.8 13.8 2508.6 -126.4

2071 38.2 53.9 -1.8 13.9 2494.7 -125.5

2072 37.6 53.4 -1.8 14.0 2480.6 -124.6

2073 36.9 52.8 -1.7 14.1 2466.6 -123.8

2074 36.3 52.1 -1.7 14.1 2452.5 -123.0

2075 35.7 51.5 -1.7 14.1 2438.4 -122.2

2076 35.1 50.8 -1.7 14.0 2424.4 -121.5

2077 34.6 50.1 -1.6 14.0 2410.4 -120.8

2078 34.0 49.4 -1.6 13.9 2396.6 -120.1

2079 33.4 48.7 -1.6 13.8 2382.8 -119.4

Based on Intermediate Assumptions of the 2004 Trustees Report. Office of the Actuary

Social Security Administration

May 5, 2005
Table 2b.c--Unified Budget Effects of the Shaw Plan

Sensitivity=government bond yield SSG proceeds go to estate if worker does before entitlement

Transfer to Change Change in Change in 

Contributions to OASDI Other Changes in Annual Debt Held Annual

SSG by Federal Trust Funds in OASDI Unified Budget by Public Unified Budget

Government from SSGs Cash Flow Cash Flow (end of year) Balance

(1) (2) (3) (4)=(3)+(2)-(1) (5) (6)

Year (Billions of Constant 2004$)

2005 0.0 0.0 0.0 0.0 0.0 0.0

2006 0.0 0.0 -6.1 -6.1 6.2 -6.3

2007 113.5 0.0 -7.4 -120.9 128.8 -124.5

2008 115.9 0.1 -8.0 -123.8 257.6 -134.1

2009 118.4 0.4 -8.4 -126.4 392.5 -143.9

2010 120.8 0.8 -8.8 -128.9 533.6 -154.0

2011 123.2 1.3 -10.3 -132.2 682.3 -165.5

2012 125.5 2.0 -10.6 -134.1 837.2 -175.9

2013 127.6 2.8 -10.7 -135.6 998.1 -186.2

2014 129.5 3.8 -10.9 -136.7 1164.9 -196.7

2015 131.8 4.9 -10.9 -137.7 1338.1 -207.7

2016 133.9 6.3 -10.9 -138.6 1517.7 -219.0

2017 136.1 7.8 -10.9 -139.3 1703.9 -230.7

2018 138.3 9.6 -11.0 -139.8 1896.8 -242.7

2019 140.5 11.5 -11.1 -140.1 2095.9 -254.3

2020 142.5 13.6 -11.2 -140.1 2301.0 -265.8

2021 144.6 16.0 -11.2 -139.8 2511.9 -277.4

2022 146.6 18.6 -11.4 -139.4 2728.7 -289.2

2023 148.7 21.4 -11.6 -138.8 2951.5 -301.2

2024 150.6 24.5 -11.8 -137.9 3179.9 -313.2

2025 152.6 27.8 -11.9 -136.7 3414.1 -325.2

2026 154.6 31.4 -11.9 -135.2 3653.7 -337.2

2027 156.7 35.3 -12.0 -133.5 3898.7 -349.4

2028 158.8 39.4 -12.2 -131.6 4149.2 -361.7

2029 160.9 43.8 -11.9 -129.1 4404.7 -373.6

2030 163.0 48.4 -11.7 -126.3 4665.0 -385.6

2031 165.2 53.4 -11.4 -123.3 4930.1 -397.6

2032 167.5 58.6 -11.2 -120.0 5199.8 -409.6

2033 169.8 64.2 -11.0 -116.6 5474.1 -421.7

2034 172.1 70.0 -10.9 -113.0 5753.1 -434.0

2035 174.5 76.2 -10.8 -109.2 6036.5 -446.2

2036 176.9 82.6 -10.7 -105.1 6324.2 -458.4

2037 179.4 89.4 -10.6 -100.6 6616.0 -470.6

2038 182.0 96.4 -10.4 -95.9 6911.8 -482.6

2039 184.5 103.8 -10.1 -90.8 7211.3 -494.6

2040 187.1 111.5 -10.0 -85.6 7514.5 -506.6

2041 189.8 119.6 -9.9 -80.1 7821.3 -518.6

2042 192.4 127.9 -10.0 -74.5 8131.6 -530.6

2043 195.1 136.6 -10.1 -68.7 8445.2 -542.6

2044 197.9 145.6 -10.3 -62.6 8762.1 -554.5

2045 200.6 154.9 -10.5 -56.1 9081.9 -566.3

2046 203.4 164.6 -10.6 -49.3 9404.5 -577.8

2047 206.2 174.7 -10.7 -42.2 9729.4 -589.2

2048 209.0 184.8 -10.7 -34.9 10056.8 -600.6

2049 211.8 194.9 -10.8 -27.7 10386.5 -612.1

2050 214.6 205.0 -10.8 -20.5 10718.9 -623.8

2051 217.4 215.0 -10.9 -13.3 11054.0 -635.7

2052 220.3 225.1 -11.1 -6.3 11391.9 -647.9

2053 223.2 235.1 -11.3 0.7 11733.0 -660.4

2054 226.1 245.1 -11.5 7.5 12077.4 -673.2

2055 229.1 255.0 -11.7 14.2 12425.2 -686.2

2056 232.1 264.9 -11.9 20.9 12776.8 -699.6

2057 235.1 274.6 -12.0 27.5 13132.1 -713.1

2058 238.2 284.3 -12.0 34.1 13491.5 -727.0

2059 241.3 293.8 -12.0 40.6 13855.1 -741.2

2060 244.4 303.3 -12.0 46.9 14223.1 -755.8

2061 247.6 312.6 -12.0 53.0 14596.0 -770.9

2062 250.8 321.8 -12.1 58.9 14974.1 -786.4

2063 254.0 330.9 -12.2 64.6 15357.7 -802.5

2064 257.3 339.8 -12.4 70.1 15747.3 -819.2

2065 260.6 348.5 -12.6 75.2 16143.4 -836.4

2066 264.0 357.1 -12.8 80.3 16546.2 -854.2

2067 267.4 365.5 -12.9 85.2 16956.1 -872.5

2068 270.9 373.8 -13.0 89.9 17373.5 -891.5

2069 274.5 381.9 -13.0 94.4 17798.9 -911.1

2070 278.1 389.9 -13.0 98.8 18232.6 -931.3

2071 281.7 397.7 -13.2 102.8 18675.2 -952.3

2072 285.4 405.3 -13.3 106.6 19127.3 -974.1

2073 289.1 412.8 -13.5 110.2 19589.3 -996.7

2074 292.9 420.2 -13.7 113.6 20061.7 -1019.9

2075 296.7 427.5 -13.9 116.8 20545.0 -1044.0

2076 300.5 434.6 -14.1 119.9 21039.6 -1068.9

2077 304.4 441.6 -14.3 122.9 21546.1 -1094.5

2078 308.3 448.6 -14.4 125.8 22064.8 -1120.9

2079 312.3 455.5 -14.6 128.6 22596.2 -1148.2

Based on Intermediate Assumptions of the 2004 Trustees Report. Office of the Actuary

Social Security Administration

May 5, 2005
Sensitivity=government bond yield SSG proceeds go to estate if worker does before entitlement

Estimate for Modified Present Law

Estimate for Proposal Theoretical Social Security with PAYGO Transfers

Net Amount of Cash Flow from the OASDI Net Amount of Cash Flow from the OASDI

Trust Funds to the General Fund of the Trust Funds to the General Fund of the

Treasury During the Year1 Treasury During the Year1

Percent Billions of Dollars Percent Billions of Dollars

Year of payroll Current $ 1/1/2004 PV Constant 2004$ of payroll Current $ 1/1/2004 PV Constant 2004$

2004 1.6 65 63 65 1.6 65 63 65

2005 1.9 89 82 87 1.9 89 82 87

2006 1.8 91 79 88 2.0 97 85 94

2007 1.9 97 80 92 2.0 105 87 99

2008 1.8 100 79 92 2.0 109 86 100

2009 1.7 96 71 85 1.8 105 78 93

2010 1.6 94 66 81 1.7 103 73 89

2011 1.4 90 60 76 1.6 101 67 85

2012 1.2 81 51 66 1.4 91 58 75

2013 1.0 69 41 55 1.2 79 47 63

2014 0.8 56 32 43 0.9 65 37 50

2015 0.5 40 21 30 0.6 48 25 36

2016 0.3 21 11 15 0.4 27 14 20

2017 0.0 0 0 0 0.1 4 2 3

2018 -0.3 -24 -11 -17 -0.2 -22 -10 -15

2019 -0.6 -51 -22 -34 -0.6 -51 -22 -35

2020 -0.8 -80 -32 -53 -0.9 -84 -34 -55

2021 -1.1 -111 -42 -71 -1.2 -119 -45 -76

2022 -1.4 -144 -52 -90 -1.5 -155 -56 -97

2023 -1.7 -178 -61 -108 -1.8 -195 -66 -118

2024 -1.9 -214 -69 -126 -2.1 -236 -76 -139

2025 -2.2 -251 -76 -144 -2.4 -279 -85 -160

2026 -2.4 -289 -83 -161 -2.7 -324 -93 -181

2027 -2.6 -327 -88 -178 -3.0 -370 -100 -201

2028 -2.8 -365 -93 -193 -3.2 -416 -106 -220

2029 -3.0 -401 -97 -206 -3.4 -463 -112 -238

2030 -3.1 -436 -99 -218 -3.6 -510 -116 -255

2031 -3.2 -471 -101 -229 -3.8 -558 -120 -271

2032 -3.3 -505 -103 -239 -4.0 -606 -123 -287

2033 -3.4 -537 -103 -247 -4.1 -653 -125 -300

2034 -3.4 -567 -103 -254 -4.2 -699 -127 -313

2035 -3.4 -594 -102 -259 -4.3 -744 -127 -324

2036 -3.4 -619 -100 -262 -4.4 -788 -127 -334

2037 -3.4 -640 -98 -264 -4.4 -831 -127 -343

2038 -3.4 -658 -95 -264 -4.4 -873 -126 -350

2039 -3.3 -674 -92 -263 -4.5 -915 -124 -357

2040 -3.2 -689 -89 -261 -4.5 -956 -123 -363

2041 -3.2 -703 -85 -259 -4.5 -1,000 -121 -369

2042 -3.1 -716 -82 -257 -4.5 -1,045 -120 -375

2043 -3.0 -729 -79 -255 -4.5 -1,091 -118 -381

2044 -2.9 -741 -76 -251 -4.5 -1,139 -116 -387

2045 -2.9 -752 -73 -248 -4.5 -1,189 -115 -393

2046 -2.8 -762 -70 -245 -4.5 -1,241 -113 -399

2047 -2.7 -772 -66 -241 -4.6 -1,297 -112 -405

2048 -2.6 -782 -64 -238 -4.6 -1,355 -110 -412

2049 -2.6 -794 -61 -235 -4.6 -1,417 -109 -419

2050 -2.5 -808 -59 -233 -4.6 -1,483 -108 -427

2051 -2.5 -826 -57 -231 -4.6 -1,555 -107 -435

2052 -2.4 -847 -55 -231 -4.7 -1,634 -106 -445

2053 -2.4 -871 -53 -231 -4.7 -1,717 -105 -455

2054 -2.4 -898 -52 -231 -4.8 -1,805 -104 -465

2055 -2.3 -928 -51 -233 -4.8 -1,899 -104 -476

2056 -2.3 -961 -49 -234 -4.9 -1,999 -103 -487

2057 -2.3 -997 -48 -236 -4.9 -2,104 -102 -499

2058 -2.3 -1,034 -47 -238 -5.0 -2,214 -102 -511

2059 -2.3 -1,072 -46 -241 -5.0 -2,328 -101 -522

2060 -2.3 -1,113 -46 -243 -5.1 -2,447 -100 -534

2061 -2.3 -1,158 -45 -246 -5.1 -2,574 -100 -547

2062 -2.3 -1,210 -44 -250 -5.2 -2,709 -99 -560

2063 -2.3 -1,268 -44 -255 -5.2 -2,854 -98 -574

2064 -2.3 -1,328 -43 -260 -5.3 -3,003 -98 -587

2065 -2.3 -1,390 -43 -264 -5.3 -3,157 -97 -600

2066 -2.4 -1,457 -42 -270 -5.4 -3,319 -96 -614

2067 -2.4 -1,529 -42 -275 -5.4 -3,489 -96 -628

2068 -2.4 -1,603 -42 -281 -5.5 -3,665 -95 -641

2069 -2.4 -1,680 -41 -286 -5.5 -3,847 -94 -655

2070 -2.4 -1,761 -41 -292 -5.6 -4,037 -93 -669

2071 -2.4 -1,848 -40 -298 -5.6 -4,235 -92 -682

2072 -2.5 -1,941 -40 -304 -5.7 -4,442 -92 -696

2073 -2.5 -2,040 -40 -311 -5.7 -4,660 -91 -710

2074 -2.5 -2,147 -39 -318 -5.7 -4,888 -90 -725

2075 -2.5 -2,260 -39 -326 -5.8 -5,127 -89 -740

2076 -2.6 -2,381 -39 -334 -5.8 -5,377 -88 -755

2077 -2.6 -2,510 -39 -343 -5.9 -5,640 -87 -770

2078 -2.6 -2,646 -39 -351 -5.9 -5,915 -87 -785

Total, 2004-78 -3,033 -5,225

Office of the Actuary 1

Trust Funds are assumed to borrow from the General Fund of the Treasury. Social Security Administration

May 5, 2005

Table 2c--OASDI Cash Flow to General Fund--Proposal vs Theoretical OASDI 
Table 2d--Change in Long-Range Trust Fund Assets/Unfunded Obligation for the Shaw Plan

Sensitivity=government bond yield SSG proceeds go to estate if worker does before entitlement

Present-Law OASDI

Trust Fund Assets Basic Transfer to Proposal OASDI

or If Negative, Changes OASDI Total Change Trust Fund Assets /

Unfunded Obligation in OASDI Trust Funds Through Unfunded Obligation

Year Through EOY1 Cash Flow from SSGs End of Year2 Through EOY

(1) (2) (3) (4) (5)

(In Billions of $, Present Value as of 1-1-04)

2005 1,674.6 0.0 0.0 0.0 1,674.6

2006 1,759.0 -5.5 0.0 -5.5 1,753.5

2007 1,845.5 -6.5 0.0 -12.0 1,833.5

2008 1,930.8 -6.9 0.1 -18.8 1,912.0

2009 2,008.4 -7.0 0.3 -25.5 1,982.9

2010 2,080.8 -7.2 0.6 -32.0 2,048.8

2011 2,148.0 -8.2 1.0 -39.2 2,108.8

2012 2,205.6 -8.1 1.5 -45.8 2,159.8

2013 2,252.4 -8.0 2.1 -51.8 2,200.7

2014 2,289.0 -7.9 2.8 -56.9 2,232.1

2015 2,314.3 -7.7 3.5 -61.1 2,253.2

2016 2,327.9 -7.5 4.3 -64.3 2,263.6

2017 2,329.7 -7.3 5.2 -66.4 2,263.3

2018 2,319.7 -7.2 6.2 -67.4 2,252.3

2019 2,297.6 -7.0 7.2 -67.1 2,230.5

2020 2,263.7 -6.8 8.4 -65.6 2,198.1

2021 2,218.5 -6.7 9.5 -62.8 2,155.7

2022 2,162.6 -6.6 10.7 -58.6 2,104.0

2023 2,096.4 -6.5 12.0 -53.1 2,043.3

2024 2,020.7 -6.4 13.3 -46.1 1,974.6

2025 1,936.1 -6.3 14.7 -37.7 1,898.4

2026 1,843.3 -6.1 16.1 -27.7 1,815.6

2027 1,743.3 -6.0 17.5 -16.2 1,727.1

2028 1,637.0 -5.9 19.0 -3.0 1,633.9

2029 1,525.4 -5.6 20.5 11.9 1,537.3

2030 1,409.4 -5.3 22.1 28.6 1,438.0

2031 1,289.5 -5.0 23.6 47.2 1,336.7

2032 1,166.5 -4.8 25.2 67.5 1,234.0

2033 1,041.2 -4.6 26.8 89.7 1,130.9

2034 914.6 -4.4 28.3 113.6 1,028.2

2035 787.2 -4.3 29.9 139.3 926.6

2036 659.9 -4.1 31.5 166.7 826.6

2037 533.0 -3.9 33.1 195.9 728.9

2038 407.2 -3.7 34.7 226.9 634.1

2039 282.7 -3.5 36.2 259.6 542.3

2040 159.8 -3.4 37.8 294.0 453.8

2041 38.4 -3.3 39.3 330.1 368.5

2042 -81.4 -3.2 40.9 367.8 286.4

2043 -199.5 -3.1 42.4 407.0 207.4

2044 -316.0 -3.1 43.8 447.7 131.7

2045 -430.8 -3.1 45.3 490.0 59.1

2046 -544.1 -3.0 46.7 533.7 -10.4

2047 -655.8 -2.9 48.1 578.9 -76.9

2048 -766.0 -2.9 49.4 625.5 -140.5

2049 -874.8 -2.8 50.6 673.3 -201.5

2050 -982.4 -2.7 51.7 722.2 -260.2

2051 -1,089.0 -2.7 52.7 772.2 -316.8

2052 -1,194.8 -2.6 53.5 823.1 -371.7

2053 -1,299.7 -2.6 54.3 874.8 -424.9

2054 -1,403.9 -2.6 54.9 927.1 -476.8

2055 -1,507.4 -2.5 55.5 980.1 -527.4

2056 -1,610.3 -2.5 55.9 1,033.5 -576.8

2057 -1,712.7 -2.5 56.3 1,087.4 -625.3

2058 -1,814.4 -2.4 56.6 1,141.6 -672.8

2059 -1,915.3 -2.3 56.8 1,196.0 -719.3

2060 -2,015.6 -2.3 56.9 1,250.7 -764.9

2061 -2,115.1 -2.2 57.0 1,305.5 -809.7

2062 -2,214.1 -2.1 56.9 1,360.2 -853.9

2063 -2,312.6 -2.1 56.8 1,415.0 -897.7

2064 -2,410.5 -2.1 56.6 1,469.6 -940.9

2065 -2,507.7 -2.0 56.4 1,523.9 -983.7

2066 -2,604.1 -2.0 56.1 1,578.1 -1,026.1

2067 -2,699.9 -2.0 55.8 1,631.9 -1,068.1

2068 -2,794.9 -1.9 55.4 1,685.3 -1,109.6

2069 -2,889.1 -1.9 54.9 1,738.4 -1,150.8

2070 -2,982.5 -1.8 54.4 1,791.0 -1,191.5

2071 -3,075.0 -1.8 53.9 1,843.1 -1,231.8

2072 -3,166.6 -1.8 53.4 1,894.7 -1,271.9

2073 -3,257.4 -1.7 52.8 1,945.8 -1,311.6

2074 -3,347.3 -1.7 52.1 1,996.2 -1,351.1

2075 -3,436.4 -1.7 51.5 2,046.0 -1,390.4

2076 -3,524.7 -1.7 50.8 2,095.2 -1,429.5

2077 -3,612.1 -1.6 50.1 2,143.7 -1,468.4

2078 -3,698.7 -1.6 49.4 2,191.6 -1,507.1

Total, 2004-78 -300.6 2,492.2

Based on Intermediate Assumptions of the 2004 Trustees Report. Office of the Actuary 1

Negative amounts represented unfunded obligation through the end of the year. Social Security Administration 2

Total change equals total change from the prior year + Column(2) + Column(3). May 5, 2005
Table 3--Trust Fund Operations--Shaw Proposal 

Assume Subsequent Legislation = Full IA Contributions from Trust Funds by 2066

Expected SSGP Yield SSG proceeds go to estate if worker does before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real IA Yield Rate 5.20 Assumed IA Participation Rate

1 100%

Ultimate Real Annuity Yield Rate 5.20

Change in "Effective" IA Contribution Rate3

OASDI OASDI OASDI From Total IA

Cost Income Annual TFR Contribution Contribution From General Fund Contribution

Year Rate2 Rate Balance 1-1-yr Rate Rate Trust Funds of Treasury Rate

2004 11.07 12.71 1.64 306 12.40

2005 10.87 12.73 1.86 325 12.40

2006 10.90 12.74 1.84 343 12.40

2007 10.90 12.76 1.86 360 12.40 2.28 2.28

2008 10.96 12.79 1.84 377 12.40 2.28 2.28

2009 11.11 12.78 1.68 390 12.40 2.28 2.28

2010 11.24 12.81 1.57 402 12.40 2.28 2.28

2011 11.42 12.86 1.44 412 12.40 2.28 2.28

2012 11.66 12.89 1.23 420 12.40 2.28 2.28

2013 11.91 12.92 1.01 427 12.40 2.28 2.28

2014 12.14 12.94 0.79 431 12.40 2.28 2.28

2015 12.40 12.95 0.55 434 12.40 2.28 2.28

2016 12.68 12.97 0.29 434 12.40 2.28 2.28

2017 12.96 12.99 0.03 432 12.40 2.28 2.28

2018 13.25 13.01 -0.24 429 12.40 2.28 2.28

2019 13.55 13.03 -0.52 424 12.40 2.28 2.28

2020 13.85 13.05 -0.80 417 12.40 2.28 2.28

2021 14.14 13.07 -1.07 409 12.40 2.28 2.28

2022 14.41 13.09 -1.32 400 12.40 2.28 2.28

2023 14.68 13.11 -1.58 391 12.40 2.28 2.28

2024 14.94 13.13 -1.82 380 12.40 2.28 2.28

2025 15.18 13.14 -2.04 368 12.40 2.28 2.28

2026 15.40 13.16 -2.24 356 12.40 2.28 2.28

2027 15.60 13.18 -2.42 343 12.40 2.28 2.28

2028 15.77 13.19 -2.57 329 12.40 2.28 2.28

2029 15.89 13.21 -2.69 316 12.40 2.28 2.28

2030 16.00 13.22 -2.78 302 12.40 2.28 2.28

2031 16.08 13.23 -2.85 289 12.40 2.28 2.28

2032 16.14 13.24 -2.89 275 12.40 2.28 2.28

2033 16.16 13.25 -2.91 261 12.40 2.28 2.28

2034 16.15 13.26 -2.89 247 12.40 2.28 2.28

2035 16.11 13.27 -2.84 234 12.40 2.28 2.28

2036 16.04 13.27 -2.77 221 12.40 2.28 2.28

2037 15.95 13.28 -2.67 209 12.40 2.28 2.28

2038 15.83 13.28 -2.55 197 12.40 2.28 2.28

2039 15.69 13.28 -2.40 186 12.40 2.28 2.28

2040 15.53 13.28 -2.25 175 12.40 2.28 2.28

2041 15.37 13.29 -2.08 165 12.40 2.28 2.28

2042 15.20 13.29 -1.91 156 12.40 2.28 2.28

2043 15.02 13.29 -1.73 148 12.40 2.28 2.28

2044 14.83 13.29 -1.54 141 12.40 2.28 2.28

2045 14.63 13.29 -1.34 135 12.40 2.28 2.28

2046 14.42 12.89 -1.53 129 -0.40 12.00 0.40 1.88 2.28

2047 14.21 12.90 -1.32 126 12.00 0.40 1.88 2.28

2048 14.00 12.90 -1.10 120 12.00 0.40 1.88 2.28

2049 13.80 12.90 -0.90 116 12.00 0.40 1.88 2.28

2050 13.60 12.90 -0.70 113 12.00 0.40 1.88 2.28

2051 13.42 12.50 -0.91 111 -0.40 11.60 0.80 1.48 2.28

2052 13.24 12.51 -0.73 111 11.60 0.80 1.48 2.28

2053 13.07 12.51 -0.56 108 11.60 0.80 1.48 2.28

2054 12.91 12.51 -0.40 107 11.60 0.80 1.48 2.28

2055 12.76 12.52 -0.24 107 11.60 0.80 1.48 2.28

2056 12.61 12.12 -0.49 108 -0.40 11.20 1.20 1.08 2.28

2057 12.47 12.12 -0.34 110 11.20 1.20 1.08 2.28

2058 12.33 12.13 -0.20 110 11.20 1.20 1.08 2.28

2059 12.19 12.13 -0.06 111 11.20 1.20 1.08 2.28

2060 12.06 12.14 0.08 114 11.20 1.20 1.08 2.28

2061 11.93 11.54 -0.39 117 -0.60 10.60 1.80 0.48 2.28

2062 11.82 11.54 -0.28 122 10.60 1.80 0.48 2.28

2063 11.72 11.55 -0.18 122 10.60 1.80 0.48 2.28

2064 11.63 11.55 -0.08 123 10.60 1.80 0.48 2.28

2065 11.54 11.55 0.02 125 10.60 1.80 0.48 2.28

2066 11.45 11.07 -0.38 128 -0.48 10.12 2.28 0.00 2.28

2067 11.38 11.08 -0.30 132 10.12 2.28 0.00 2.28

2068 11.30 11.08 -0.22 132 10.12 2.28 0.00 2.28

2069 11.24 11.08 -0.15 132 10.12 2.28 0.00 2.28

2070 11.17 11.09 -0.09 134 10.12 2.28 0.00 2.28

2071 11.12 11.09 -0.03 135 10.12 2.28 0.00 2.28

2072 11.08 11.09 0.01 137 10.12 2.28 0.00 2.28

2073 11.04 11.09 0.05 140 10.12 2.28 0.00 2.28

2074 11.02 11.10 0.08 142 10.12 2.28 0.00 2.28

2075 11.00 11.10 0.10 145 10.12 2.28 0.00 2.28

2076 10.98 11.10 0.12 149 10.12 2.28 0.00 2.28

2077 10.98 11.10 0.13 152 10.12 2.28 0.00 2.28

2078 10.98 11.11 0.13 155 10.12 2.28 0.00 2.28

2079 10.98 11.11 0.13 158 10.12 2.28 0.00 2.28

 Summarized OASDI

Cost Income Actuarial Change in

2004 Rate Rate Balance Actuarial Balance

-2078 13.39 13.43 0.05 1.93

Based on Intermediate Assumptions of the 2004 Trustees Report 1

Assumes that all workers will invest 4% in IAs up to $1,000 (for 2006 earnings),

 with the $1,000 threshold to be wage-indexed for years after 2006 Office of the Actuary 2

Net of Transfers from SSG Accounts to the Trust Funds. Social Security Administration 3

Reflects that contributions for a given year are assumed not to be credited until the May 5, 2005

 following year.
Table 4--Trust Fund Operations--Shaw Proposal 

Sensitivity=1 percent higher than expected yield SSG proceeds go to estate if worker does before entitlement

Ultimate Real Trust Fund Interest Rate 3.00

Ultimate Real IA Yield Rate 6.20 Assumed IA Participation Rate

1 100%

Ultimate Real Annuity Yield Rate 6.20

Change in "Effective" IA Contribution Rate3

OASDI OASDI OASDI From Total IA

Cost Income Annual TFR Contribution Contribution From General Fund Contribution

Year Rate2 Rate Balance 1-1-yr Rate Rate Trust Funds of Treasury Rate

2004 11.07 12.71 1.64 306 12.40

2005 10.87 12.73 1.86 325 12.40

2006 10.90 12.74 1.84 343 12.40

2007 10.90 12.76 1.86 360 12.40 2.28 2.28

2008 10.96 12.79 1.84 377 12.40 2.28 2.28

2009 11.11 12.78 1.68 390 12.40 2.28 2.28

2010 11.24 12.81 1.57 402 12.40 2.28 2.28

2011 11.42 12.86 1.44 412 12.40 2.28 2.28

2012 11.66 12.89 1.23 420 12.40 2.28 2.28

2013 11.91 12.92 1.01 427 12.40 2.28 2.28

2014 12.14 12.94 0.80 431 12.40 2.28 2.28

2015 12.40 12.95 0.56 434 12.40 2.28 2.28

2016 12.67 12.97 0.30 434 12.40 2.28 2.28

2017 12.95 12.99 0.04 432 12.40 2.28 2.28

2018 13.23 13.01 -0.22 429 12.40 2.28 2.28

2019 13.53 13.03 -0.50 425 12.40 2.28 2.28

2020 13.82 13.05 -0.77 418 12.40 2.28 2.28

2021 14.10 13.07 -1.03 411 12.40 2.28 2.28

2022 14.37 13.09 -1.28 402 12.40 2.28 2.28

2023 14.64 13.11 -1.53 393 12.40 2.28 2.28

2024 14.88 13.13 -1.75 383 12.40 2.28 2.28

2025 15.11 13.14 -1.97 372 12.40 2.28 2.28

2026 15.31 13.16 -2.15 360 12.40 2.28 2.28

2027 15.49 13.18 -2.32 348 12.40 2.28 2.28

2028 15.64 13.19 -2.45 335 12.40 2.28 2.28

2029 15.75 13.21 -2.54 323 12.40 2.28 2.28

2030 15.83 13.22 -2.61 311 12.40 2.28 2.28

2031 15.88 13.23 -2.65 299 12.40 2.28 2.28

2032 15.91 13.24 -2.67 286 12.40 2.28 2.28

2033 15.90 13.25 -2.65 274 12.40 2.28 2.28

2034 15.86 13.26 -2.60 263 12.40 2.28 2.28

2035 15.78 13.27 -2.51 252 12.40 2.28 2.28

2036 15.67 13.27 -2.39 242 12.40 2.28 2.28

2037 15.52 13.28 -2.25 233 12.40 2.28 2.28

2038 15.35 13.28 -2.07 225 12.40 2.28 2.28

2039 15.15 13.28 -1.87 218 12.40 2.28 2.28

2040 14.94 13.28 -1.65 212 12.40 2.28 2.28

2041 14.71 13.29 -1.42 207 12.40 2.28 2.28

2042 14.47 13.29 -1.18 204 12.40 2.28 2.28

2043 14.21 13.29 -0.92 203 12.40 2.28 2.28

2044 13.94 13.29 -0.65 204 12.40 2.28 2.28

2045 13.65 13.29 -0.36 207 12.40 2.28 2.28

2046 13.35 13.29 -0.06 212 12.40 2.28 2.28

2047 13.04 13.30 0.26 220 12.40 2.28 2.28

2048 12.72 13.30 0.58 231 12.40 2.28 2.28

2049 12.41 13.30 0.89 245 12.40 2.28 2.28

2050 12.10 13.30 1.20 263 12.40 2.28 2.28

2051 11.80 13.30 1.50 284 12.40 2.28 2.28

2052 11.52 13.31 1.79 309 12.40 2.28 2.28

2053 11.23 13.31 2.08 338 12.40 2.28 2.28

2054 10.95 13.31 2.36 370 12.40 2.28 2.28

2055 10.68 13.32 2.63 408 12.40 2.28 2.28

2056 10.42 13.32 2.90 450 12.40 2.28 2.28

2057 10.16 13.32 3.17 498 12.40 2.28 2.28

2058 9.90 13.33 3.43 551 12.40 2.28 2.28

2059 9.64 13.33 3.69 610 12.40 2.28 2.28

2060 9.39 13.34 3.94 675 12.40 2.28 2.28

2061 9.16 13.34 4.18 747 12.40 2.28 2.28

2062 8.93 13.34 4.41 825 12.40 2.28 2.28

2063 8.72 13.35 4.62 908 12.40 2.28 2.28

2064 8.52 13.35 4.83 999 12.40 2.28 2.28

2065 8.32 13.35 5.03 1098 12.40 2.28 2.28

2066 8.14 13.36 5.22 1203 12.40 2.28 2.28

2067 7.96 13.36 5.40 1314 12.40 2.28 2.28

2068 7.80 13.36 5.57 1432 12.40 2.28 2.28

2069 7.64 13.37 5.72 1557 12.40 2.28 2.28

2070 7.50 13.37 5.87 1689 12.40 2.28 2.28

2071 7.37 13.37 6.00 1826 12.40 2.28 2.28

2072 7.25 13.37 6.12 1968 12.40 2.28 2.28

2073 7.15 13.38 6.23 2114 12.40 2.28 2.28

2074 7.06 13.38 6.32 2264 12.40 2.28 2.28

2075 6.99 13.38 6.39 2416 12.40 2.28 2.28

2076 6.93 13.39 6.46 2569 12.40 2.28 2.28

2077 6.88 13.39 6.51 2724 12.40 2.28 2.28

2078 6.84 13.39 6.55 2880 12.40 2.28 2.28

2079 6.81 13.39 6.59 3036 12.40 2.28 2.28

 Summarized OASDI

Cost Income Actuarial Change in

2004 Rate Rate Balance Actuarial Balance

-2078 12.45 13.85 1.40 3.29

Based on Intermediate Assumptions of the 2004 Trustees Report 1

Assumes that all workers will invest 4% in IAs up to $1,000 (for 2006 earnings),

 with the $1,000 threshold to be wage-indexed for years after 2006 Office of the Actuary 2

Net of Transfers from SSG Accounts to the Trust Funds. Social Security Administration 3

Reflects that contributions for a given year are assumed not to be credited until the May 5, 2005

 following year.
Table 5--Trust Fund Operations--Shaw Proposal 

Sensitivity=1 percent lower than expected yield SSG proceeds go to estate if worker does before entitlement

Ultimate Real Trust Fund Interest Rate 3.00 95%

Ultimate Real IA Yield Rate 4.20 Assumed IA Participation Rate

1 100%

Ultimate Real Annuity Yield Rate 4.20

Change in "Effective" IA Contribution Rate3

OASDI OASDI OASDI From Total IA

Cost Income Annual TFR Contribution Contribution From General Fund Contribution

Year Rate2 Rate Balance 1-1-yr Rate Rate Trust Funds of Treasury Rate

2004 11.07 12.71 1.64 306 12.40

2005 10.87 12.73 1.86 325 12.40

2006 10.90 12.74 1.84 343 12.40

2007 10.90 12.76 1.86 360 12.40 2.28 2.28

2008 10.96 12.79 1.84 377 12.40 2.28 2.28

2009 11.11 12.78 1.68 390 12.40 2.28 2.28

2010 11.24 12.81 1.57 402 12.40 2.28 2.28

2011 11.42 12.86 1.44 412 12.40 2.28 2.28

2012 11.66 12.89 1.23 420 12.40 2.28 2.28

2013 11.91 12.92 1.01 427 12.40 2.28 2.28

2014 12.15 12.94 0.79 431 12.40 2.28 2.28

2015 12.41 12.95 0.55 433 12.40 2.28 2.28

2016 12.69 12.97 0.29 433 12.40 2.28 2.28

2017 12.97 12.99 0.02 431 12.40 2.28 2.28

2018 13.26 13.01 -0.25 428 12.40 2.28 2.28

2019 13.56 13.03 -0.53 423 12.40 2.28 2.28

2020 13.87 13.05 -0.82 416 12.40 2.28 2.28

2021 14.16 13.07 -1.10 408 12.40 2.28 2.28

2022 14.45 13.09 -1.36 399 12.40 2.28 2.28

2023 14.73 13.11 -1.62 388 12.40 2.28 2.28

2024 14.99 13.13 -1.87 377 12.40 2.28 2.28

2025 15.25 13.14 -2.10 365 12.40 2.28 2.28

2026 15.48 13.16 -2.32 352 12.40 2.28 2.28

2027 15.69 13.18 -2.51 338 12.40 2.28 2.28

2028 15.87 13.19 -2.68 324 12.40 2.28 2.28

2029 16.02 13.21 -2.81 310 12.40 2.28 2.28

2030 16.14 13.22 -2.92 295 12.40 2.28 2.28

2031 16.24 13.23 -3.01 280 12.40 2.28 2.28

2032 16.32 13.24 -3.08 265 12.40 2.28 2.28

2033 16.37 13.25 -3.12 250 12.40 2.28 2.28

2034 16.39 13.26 -3.13 235 12.40 2.28 2.28

2035 16.38 13.27 -3.12 219 12.40 2.28 2.28

2036 16.35 13.27 -3.08 204 12.40 2.28 2.28

2037 16.29 13.28 -3.01 190 12.40 2.28 2.28

2038 16.21 13.28 -2.93 175 12.40 2.28 2.28

2039 16.11 13.28 -2.83 161 12.40 2.28 2.28

2040 16.00 13.28 -2.71 147 12.40 2.28 2.28

2041 15.88 13.29 -2.60 134 12.40 2.28 2.28

2042 15.77 13.29 -2.48 120 12.40 2.28 2.28

2043 15.64 13.29 -2.35 108 12.40 2.28 2.28

2044 15.51 13.29 -2.22 95 12.40 2.28 2.28

2045 15.37 13.29 -2.08 83 12.40 2.28 2.28

2046 15.24 13.29 -1.94 72 12.40 2.28 2.28

2047 15.09 13.30 -1.80 61 12.40 2.28 2.28

2048 14.96 13.30 -1.66 51 12.40 2.28 2.28

2049 14.82 13.30 -1.53 41 12.40 2.28 2.28

2050 14.70 13.30 -1.40 31 12.40 2.28 2.28

2051 14.59 13.30 -1.29 23 12.40 2.28 2.28

2052 14.49 13.31 -1.19 14 12.40 2.28 2.28

2053 14.40 13.31 -1.09 6 12.40 2.28 2.28

2054 14.31 13.31 -1.00 -- 12.40 2.28 2.28

2055 14.23 13.32 -0.92 -- 12.40 2.28 2.28

2056 14.16 13.32 -0.84 -- 12.40 2.28 2.28

2057 14.09 13.32 -0.77 -- 12.40 2.28 2.28

2058 14.03 13.33 -0.70 -- 12.40 2.28 2.28

2059 13.96 13.33 -0.63 -- 12.40 2.28 2.28

2060 13.90 13.34 -0.57 -- 12.40 2.28 2.28

2061 13.85 13.34 -0.51 -- 12.40 2.28 2.28

2062 13.81 13.34 -0.46 -- 12.40 2.28 2.28

2063 13.77 13.35 -0.43 -- 12.40 2.28 2.28

2064 13.74 13.35 -0.39 -- 12.40 2.28 2.28

2065 13.71 13.35 -0.36 -- 12.40 2.28 2.28

2066 13.69 13.36 -0.33 -- 12.40 2.28 2.28

2067 13.67 13.36 -0.30 -- 12.40 2.28 2.28

2068 13.65 13.36 -0.28 -- 12.40 2.28 2.28

2069 13.63 13.37 -0.26 -- 12.40 2.28 2.28

2070 13.61 13.37 -0.24 -- 12.40 2.28 2.28

2071 13.60 13.37 -0.23 -- 12.40 2.28 2.28

2072 13.60 13.37 -0.22 -- 12.40 2.28 2.28

2073 13.60 13.38 -0.22 -- 12.40 2.28 2.28

2074 13.61 13.38 -0.23 -- 12.40 2.28 2.28

2075 13.62 13.38 -0.23 -- 12.40 2.28 2.28

2076 13.63 13.39 -0.24 -- 12.40 2.28 2.28

2077 13.65 13.39 -0.26 -- 12.40 2.28 2.28

2078 13.67 13.39 -0.28 -- 12.40 2.28 2.28

2079 13.69 13.39 -0.30 -- 12.40 2.28 2.28

 Summarized OASDI

Cost Income Actuarial Change in

2004 Rate Rate Balance Actuarial Balance

-2078 14.05 13.85 -0.20 1.69

Based on Intermediate Assumptions of the 2004 Trustees Report 1

Assumes that all workers will invest 4% in IAs up to $1,000 (for 2006 earnings),

 with the $1,000 threshold to be wage-indexed for years after 2006 Office of the Actuary 2

Net of Transfers from SSG Accounts to the Trust Funds. Social Security Administration 3

Reflects that contributions for a given year are assumed not to be credited until the May 5, 2005

 following year.