SOCIAL SECURITY ADMINISTRATION BALTIMORE, MD 21235-0001

SOCIAL SECURITY

Office of the Chief Actuary

March 3, 2011

The Honorable Peter DeFazio

House of Representatives

Washington, D.C. 20515

Dear Mr. DeFazio:

I am writing in response to your letter of March 1, 2011 requesting estimates of the financial 

effects on Social Security of H.R. 797, the “No Loopholes in Social Security Taxes Act”, which 

was introduced on February 18, 2011. The estimates and analysis provided in this letter reflect 

clarification of the intent of the Bill based on discussion with Michael Hayes of your staff. A 

detailed description of our understanding of the intent of the Bill is included below. All 

estimates are based on the intermediate assumptions of the 2010 Trustees Report. The estimates 

presented reflect the combined efforts of many in our office, but particularly Alice Wade, 

Christopher Chaplain, and William Piet. 

The Bill would modify the Internal Revenue Code of 1986 to subject a worker’s OASDI covered 

earnings in excess of $250,000 in any calendar year after 2011 to the combined OASDI payroll 

tax rate of 12.4 percent. This is the same tax rate that is applied under current law to OASDI 

covered earnings up to the contribution and benefit base ($106,800 for 2010). Under present 

law, the contribution and benefit base is scheduled to increase in the future based on increases in 

the average wage in the U.S. economy. However, the threshold of $250,000 would be constant 

after 2012 until the contribution and benefit base exceeds this level, at which point the threshold 

would be set equal to the contribution and benefit base for that and all subsequent years. 

Earnings subject to tax above the threshold would not be included in earnings credited for the 

purpose of OASDI benefit computation. 

Beyond the specification of the Bill, we understand that the intent is to include both wages and 

self-employment earnings in the consideration of earnings above the threshold. For workers with 

more than one employer (including self employment) for a given year, total tax liability for the 

year would be computed as if all earnings had been received from a single employer for the year, 

but in no case would any employee or employer pay less tax than they would under current law. 

To the extent adjustments of payroll tax liability are needed for a given year, employees would 

make such adjustments on their income tax filing forms. Employers would be contacted by SSA 

regarding any additional tax liability due to multiple jobs for employees during the year. 

The balance of this letter provides summary and detailed estimates of the effects of enactment of 

the Bill.
Page 2 – The Honorable Peter DeFazio

Summary of Effects on Actuarial Status

Figure 1 below illustrates the expected change in the combined Old-Age and Survivors Insurance 

(OASI) and Disability Insurance (DI) Trust Fund assets, expressed as a percentage of annual 

program cost, with enactment of this Bill. Assuming enactment, the OASDI program would be 

expected to be solvent for the next 75 years, under the intermediate assumptions of the 2010 

Trustees Report. The level of assets for the theoretical combined OASI and DI Trust Funds 

would remain positive through 2084, permitting full payment of scheduled benefits on a timely 

basis. However, the combined assets would be declining as a percentage of the annual cost of 

the program at the end of the period. For this reason, the OASDI program would not meet the 

requirements of sustainable solvency. 

Figure 1. Present Law and Proposal OASDI Trust Fund Assets as Percent of Annual Cost: 2010 TR 

Intermediate Assumptions

0

50

100

150

200

250

300

350

400

2010 2020 2030 2040 2050 2060 2070 2080 2090

Trust Fund Ratio

Present Law Trust Fund Ratio Proposal

Note: Trust Fund Ratio for a given year is the ratio of assets in the combined OASI and DI Trust Fund assets at the 

beginning of the year to the cost of the program during the year.

Enactment of the Bill would improve the long-range OASDI actuarial balance by 2.07 percent of 

taxable payroll, replacing the actuarial deficit of 1.92 percent of taxable payroll under current 

law with a positive actuarial balance of 0.15 percent of payroll. The assets in the combined 

OASI and DI Trust Funds would be positive throughout the 75-year period, meaning that 

solvency would be expected throughout the period. However, assets at the end of 2084, while 

still positive, would be declining as a percent of annual program cost and so the program would 

not meet the requirements for sustainable solvency. 
Page 3 – The Honorable Peter DeFazio

Figure 2 below illustrates annual projected levels of cost and income as a percentage of presentlaw taxable payroll. The projected levels of cost are shown for present-law scheduled benefits 

(“cost”) and payable benefits (“expenditures,” when payable benefits are less than scheduled 

benefits) and for benefits under this Bill. Under this Bill, the combined OASI and DI Trust 

Funds do not exhaust, and thus payable benefits equal scheduled benefits throughout the 75-year 

projection period.

Figure 2. Proposal and Present Law Cost and Tax Income as Percent of Taxable Payroll: 2010 TR 

Intermediate Assumptions

11

12

13

14

15

16

17

18

19

2010 2020 2030 2040 2050 2060 2070 2080 2090

Percent of Present-Law Taxable Payroll

Present Law Tax Income

Present Law Cost

Present Law Expenditures

Proposal Cost

Proposal Tax Income

Figure 2 shows that the estimated cost of the OASDI program would be very slightly reduced 

under this Bill. A slight decrease in benefits is projected to follow from a small decrease in the 

proportion of employee compensation that would be paid in the form of wages under the currentlaw contribution and benefit base. This small reduction in wages as a percentage of employee 

compensation reflects the assumed behavioral response of employees and employers to the 

additional payroll taxes under the Bill. 
Page 4 – The Honorable Peter DeFazio

It is also useful to consider the projected cost and income for the OASDI program expressed as a 

percentage of Gross Domestic Product (GDP). The graph below illustrates these levels under 

both present law and this Bill. 

Figure 3. Proposal and Present Law Cost and Tax Income as Percent of GDP: 2010 TR Intermediate 

Assumptions

4.0

4.5

5.0

5.5

6.0

6.5

2010 2020 2030 2040 2050 2060 2070 2080 2090

Percent of GDP

Present Law Tax Income

Present Law Cost

Present Law Expenditures

Proposal Cost

Proposal Tax Income

Detailed Financial Results 

Benefit Illustrations

Benefit illustrations are not provided for the Bill because benefit levels would not be materially 

changed from the scheduled benefit levels under current law.

Trust Fund Operations

Table 1 shows the annual cost and income rates, annual balances, and trust fund ratios for 

OASDI assuming enactment of the Bill. This table also shows the change from present law in 

these cost rates, income rates, and balances. Included at the bottom of this table are summarized 

rates for the 75-year long-range period and the expected year of trust fund exhaustion under this 

Bill. 

Table 1 indicates that the OASDI program is projected to be solvent throughout the 75-year 

projection period assuming enactment of the Bill. After 2021, the trust fund ratio is projected to 
Page 5 – The Honorable Peter DeFazio

decline, reaching 208 percent of the next year’s annual program cost for 2084, the last year of the 

75-year projection period. The actuarial deficit for the OASDI program over the 75-year 

projection period would be improved by an estimated 2.07 percent of taxable payroll, from an 

actuarial deficit of 1.92 percent of payroll projected under current law to a positive actuarial 

balance of 0.15 percent of payroll under the Bill. 

Program Transfers and Assets

Column 5 of table 1a provides a projection of the asset level for the combined OASI and DI 

Trust Funds under the Bill, expressed in present value dollars discounted to January 1, 2010. For 

purpose of comparison, the net OASDI Trust Fund assets, expressed in present value dollars, are 

also shown for a theoretical Social Security program where borrowing authority is assumed for 

the Trust Funds. Columns 1 through 3 are all zeros because no General Fund transfers are 

specified in this Bill. Gross Domestic Product, expressed in present value dollars, is shown in 

column 6 for comparison with other values in the table. 

Effect on the Federal Unified Budget

Table 1b shows the projected effect, in present value discounted dollars, on the Federal unified 

budget cash flows and balances assuming enactment of the Bill. Table 1b.n provides the 

estimated nominal dollar effect of enactment of the Bill on the annual unified budget balances 

for years 2010 through 2019. All values in these tables represent the amount of the change that 

would be expected due to enactment of the Bill, from the level that would be projected under 

current law. 

The effect of the plan on unified budget cash flow (column 3) is expected to be positive for 2012 

and throughout the remainder of the long-range period. Column 4 provides the projected effect 

of implementing the plan on the Federal debt held by the public. Column 5 provides the 

projected effect on the annual unified budget balances, including both the cash flow effect in 

column 3 and the additional interest on the accumulated debt indicated in column 4. Under this 

Bill, Federal debt held by the public would be reduced by nearly $1 trillion in nominal dollars by 

the end of 2019. However, there would be essentially no change in the total Federal debt subject 

to ceiling because the OASDI combined Trust Fund assets, which are a part of the total Federal 

debt, would increase by the same amount. It is important to note that these estimates are based 

on the intermediate assumptions of the 2010 Trustees Report and thus are not consistent with 

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

Annual Trust Fund Operations as a Percentage of GDP

Table 1c provides annual cost, annual expenditures (on a payable basis), and annual tax income 

for the OASDI program expressed as a percentage of GDP. These values are shown for both 

present law and assuming enactment of the Bill. Showing the annual trust fund flows as a 

percentage of GDP provides an additional perspective on these trust fund operations in relation 

to the total value of goods and services produced in the United States.
Page 6 – The Honorable Peter DeFazio

Effects on Trust Fund Assets and Unfunded Obligations

Table 1d provides estimates of the changes due to the Bill in the level of projected trust fund 

assets under present law and, for years after trust fund exhaustion, the level of unfunded 

obligations under present law. All values in the table are expressed in present-value discounted 

dollars. For the 75-year long-range period as a whole, the present-law unfunded obligation of 

$5.4 trillion in present value is replaced with a positive trust fund balance of $0.9 trillion in 

present value through the end of the period. This change is the combination of the following: 

• A $6.2 trillion increase in revenue from applying the payroll tax to covered earnings 

above the present-law contribution and benefit base (column 2), less

• A $0.1 trillion reduction in cost from the behavioral response to additional payroll tax, 

causing a small decrease in the share of employee compensation that is received in 

wages, and thus a small decrease in total benefits.

We hope these estimates will be helpful. Please let me know if we may provide further 

assistance.

Sincerely,

Stephen C. Goss

Chief Actuary

Enclosures 
Year Cost Rate

Income

Rate

Annual

Balance Cost Rate

Income

Rate

Annual

Balance

2010 13.09 12.33 -0.76 355 0.00 0.00 0.00

2011 13.04 12.91 -0.12 353 0.00 0.00 0.00

2012 12.84 13.91 1.07 350 0.00 1.04 1.04

2013 12.82 14.07 1.25 353 0.00 1.17 1.17

2014 12.86 14.16 1.30 357 0.00 1.24 1.24

2015 12.98 14.25 1.27 361 0.00 1.31 1.31

2016 13.10 14.34 1.23 365 0.00 1.38 1.38

2017 13.30 14.43 1.12 368 0.00 1.44 1.44

2018 13.54 14.51 0.96 371 0.00 1.49 1.50

2019 13.83 14.58 0.74 373 0.00 1.55 1.55

2020 14.14 14.65 0.50 373 0.00 1.60 1.60

2021 14.45 14.72 0.27 373 -0.01 1.65 1.65

2022 14.74 14.78 0.04 372 -0.01 1.70 1.71

2023 15.02 14.85 -0.17 370 -0.01 1.75 1.76

2024 15.28 14.92 -0.35 367 -0.01 1.80 1.81

2025 15.52 14.99 -0.53 364 -0.01 1.86 1.87

2026 15.74 15.07 -0.68 360 -0.01 1.92 1.93

2027 15.94 15.14 -0.80 356 -0.01 1.98 2.00

2028 16.12 15.22 -0.89 352 -0.02 2.05 2.06

2029 16.27 15.30 -0.96 348 -0.02 2.12 2.14

2030 16.39 15.39 -1.00 344 -0.02 2.19 2.21

2031 16.49 15.47 -1.01 340 -0.02 2.27 2.29

2032 16.57 15.53 -1.04 336 -0.02 2.32 2.34

2033 16.64 15.54 -1.10 333 -0.02 2.32 2.35

2034 16.68 15.54 -1.14 330 -0.02 2.32 2.35

2035 16.70 15.55 -1.15 327 -0.03 2.32 2.35

2036 16.71 15.55 -1.16 324 -0.03 2.33 2.35

2037 16.71 15.55 -1.15 321 -0.03 2.33 2.36

2038 16.68 15.56 -1.13 318 -0.03 2.33 2.36

2039 16.65 15.56 -1.09 316 -0.03 2.33 2.36

2040 16.61 15.56 -1.05 314 -0.04 2.33 2.36

2041 16.56 15.56 -1.00 312 -0.04 2.33 2.37

2042 16.51 15.56 -0.96 311 -0.04 2.33 2.37

2043 16.47 15.56 -0.91 310 -0.04 2.33 2.37

2044 16.43 15.56 -0.87 309 -0.04 2.33 2.37

2045 16.40 15.56 -0.84 308 -0.04 2.33 2.38

2046 16.37 15.56 -0.81 308 -0.05 2.33 2.38

2047 16.35 15.56 -0.79 307 -0.05 2.33 2.38

2048 16.32 15.56 -0.76 307 -0.05 2.34 2.39

2049 16.30 15.56 -0.74 307 -0.05 2.34 2.39

2050 16.28 15.56 -0.72 307 -0.06 2.34 2.39

2051 16.27 15.56 -0.70 307 -0.06 2.34 2.40

2052 16.26 15.57 -0.70 306 -0.06 2.34 2.40

2053 16.27 15.57 -0.70 306 -0.06 2.34 2.40

2054 16.28 15.57 -0.71 306 -0.06 2.34 2.41

2055 16.30 15.57 -0.73 305 -0.07 2.34 2.41

2056 16.32 15.58 -0.75 304 -0.07 2.34 2.41

2057 16.35 15.58 -0.77 303 -0.07 2.34 2.41

2058 16.37 15.58 -0.78 302 -0.07 2.35 2.42

2059 16.39 15.59 -0.80 301 -0.07 2.35 2.42

2060 16.41 15.59 -0.82 300 -0.08 2.35 2.42

2061 16.43 15.59 -0.84 299 -0.08 2.35 2.43

2062 16.45 15.60 -0.86 297 -0.08 2.35 2.43

2063 16.48 15.60 -0.88 296 -0.08 2.35 2.43

2064 16.50 15.60 -0.90 294 -0.08 2.35 2.43

2065 16.53 15.61 -0.93 292 -0.08 2.35 2.44

2066 16.57 15.61 -0.95 290 -0.08 2.36 2.44

2067 16.60 15.62 -0.99 287 -0.08 2.36 2.44

2068 16.64 15.62 -1.02 285 -0.09 2.36 2.44

2069 16.68 15.62 -1.05 282 -0.09 2.36 2.45

2070 16.72 15.63 -1.09 279 -0.09 2.36 2.45

2071 16.76 15.63 -1.13 275 -0.09 2.36 2.45

2072 16.80 15.64 -1.17 272 -0.09 2.36 2.45

2073 16.85 15.64 -1.21 268 -0.09 2.37 2.46

2074 16.89 15.65 -1.25 264 -0.09 2.37 2.46

2075 16.94 15.65 -1.29 259 -0.09 2.37 2.46

2076 16.98 15.65 -1.33 255 -0.09 2.37 2.46

2077 17.02 15.66 -1.37 250 -0.09 2.37 2.46

2078 17.07 15.66 -1.41 245 -0.09 2.37 2.46

2079 17.11 15.67 -1.45 239 -0.09 2.37 2.47

2080 17.16 15.67 -1.49 234 -0.09 2.38 2.47

2081 17.20 15.68 -1.53 228 -0.09 2.38 2.47

2082 17.25 15.68 -1.56 221 -0.09 2.38 2.47

2083 17.29 15.68 -1.60 215 -0.09 2.38 2.47

2084 17.33 15.69 -1.64 208 -0.09 2.38 2.47

2085 17.37 15.69 -1.68 201 -0.09 2.38 2.48

Cost Rate Income Rate

Actuarial 

Balance

Change in 

Cost rate

Change in 

Income Rate

Change in 

Actuarial

Balance

15.89% 16.03% 0.15% N/A -0.04% 2.02% 2.07%

1 Under present law the year of exhaustion is 2037

Year of 

Exhaustion1

Summarized Rates: OASDI

Based on Intermediate Assumptions of the 2010 Trustees Report

March 2, 2011

Summarized Rates: OASDI

2010 - 2084

Office of the Chief Actuary

Social Security Administration

Table 1 - OASDI Cost Rate, Income Rate, Annual Balance, and Trust Fund Ratio

Proposal

Expressed as a percentage of present-law

taxable payroll Trust Fund

Ratio

1-1-year

Expressed as a percentage of present-law

taxable payroll

Change in Present Law

H.R. 797 "No Loopholes in Social Security Taxes Act": Introduced by Representative DeFazio
Percentage

of Payroll

Annual

Amounts

Accumulated as of 

End of Year

Gross Domestic 

Product

Without General

Fund Transfers

With Plan General

Fund Transfers

(1) (2) (3) (5) (6) (7) (8)

2010 0.0 0.0 0.0 2,500.1 14,440.7 2,500.1 2,500.1

2011 0.0 0.0 0.0 2,493.9 14,447.1 2,493.9 2,493.9

2012 0.0 0.0 0.0 2,552.2 14,629.9 2,495.8 2,495.8

2013 0.0 0.0 0.0 2,621.5 14,850.2 2,500.7 2,500.7

2014 0.0 0.0 0.0 2,694.6 15,008.0 2,504.4 2,504.4

2015 0.0 0.0 0.0 2,766.5 15,093.9 2,502.6 2,502.6

2016 0.0 0.0 0.0 2,836.9 15,113.0 2,495.2 2,495.2

2017 0.0 0.0 0.0 2,901.0 15,084.7 2,478.0 2,478.0

2018 0.0 0.0 0.0 2,956.1 14,993.3 2,448.8 2,448.8

2019 0.0 0.0 0.0 2,998.4 14,866.6 2,404.4 2,404.4

2020 0.0 0.0 0.0 3,027.0 14,744.5 2,344.3 2,344.3

2021 0.0 0.0 0.0 3,042.5 14,612.8 2,269.2 2,269.2

2022 0.0 0.0 0.0 3,045.7 14,470.7 2,180.2 2,180.2

2023 0.0 0.0 0.0 3,037.8 14,322.0 2,078.2 2,078.2

2024 0.0 0.0 0.0 3,020.0 14,168.7 1,964.7 1,964.7

2025 0.0 0.0 0.0 2,993.3 14,006.1 1,840.6 1,840.6

2026 0.0 0.0 0.0 2,959.5 13,848.9 1,707.4 1,707.4

2027 0.0 0.0 0.0 2,919.9 13,695.6 1,566.5 1,566.5

2028 0.0 0.0 0.0 2,876.1 13,543.6 1,419.1 1,419.1

2029 0.0 0.0 0.0 2,829.3 13,388.7 1,266.6 1,266.6

2030 0.0 0.0 0.0 2,781.4 13,238.7 1,110.6 1,110.6

2031 0.0 0.0 0.0 2,733.5 13,096.4 951.9 951.9

2032 0.0 0.0 0.0 2,684.8 12,955.3 791.4 791.4

2033 0.0 0.0 0.0 2,634.0 12,814.6 629.9 629.9

2034 0.0 0.0 0.0 2,582.1 12,675.9 468.5 468.5

2035 0.0 0.0 0.0 2,529.9 12,539.7 308.0 308.0

2036 0.0 0.0 0.0 2,478.1 12,408.4 149.0 149.0

2037 0.0 0.0 0.0 2,427.1 12,278.7 -7.9 -7.9

2038 0.0 0.0 0.0 2,377.9 12,153.7 -162.2 -162.2

2039 0.0 0.0 0.0 2,330.8 12,027.7 -313.2 -313.2

2040 0.0 0.0 0.0 2,286.0 11,899.8 -460.7 -460.7

2041 0.0 0.0 0.0 2,243.8 11,774.2 -604.7 -604.7

2042 0.0 0.0 0.0 2,204.0 11,649.7 -745.2 -745.2

2043 0.0 0.0 0.0 2,166.5 11,526.1 -882.3 -882.3

2044 0.0 0.0 0.0 2,131.1 11,403.5 -1,016.3 -1,016.3

2045 0.0 0.0 0.0 2,097.4 11,281.3 -1,147.4 -1,147.4

2046 0.0 0.0 0.0 2,065.4 11,159.4 -1,275.9 -1,275.9

2047 0.0 0.0 0.0 2,034.6 11,036.6 -1,402.0 -1,402.0

2048 0.0 0.0 0.0 2,005.3 10,914.9 -1,525.6 -1,525.6

2049 0.0 0.0 0.0 1,977.2 10,794.6 -1,646.9 -1,646.9

2050 0.0 0.0 0.0 1,950.4 10,674.1 -1,766.0 -1,766.0

2051 0.0 0.0 0.0 1,924.4 10,553.6 -1,883.2 -1,883.2

2052 0.0 0.0 0.0 1,898.9 10,434.0 -1,998.8 -1,998.8

2053 0.0 0.0 0.0 1,873.6 10,314.8 -2,113.3 -2,113.3

2054 0.0 0.0 0.0 1,848.3 10,196.3 -2,226.7 -2,226.7

2055 0.0 0.0 0.0 1,822.8 10,078.9 -2,339.4 -2,339.4

2056 0.0 0.0 0.0 1,796.8 9,963.1 -2,451.4 -2,451.4

2057 0.0 0.0 0.0 1,770.6 9,849.3 -2,562.8 -2,562.8

2058 0.0 0.0 0.0 1,744.0 9,737.3 -2,673.5 -2,673.5

2059 0.0 0.0 0.0 1,717.3 9,627.1 -2,783.4 -2,783.4

2060 0.0 0.0 0.0 1,690.3 9,517.7 -2,892.6 -2,892.6

2061 0.0 0.0 0.0 1,662.9 9,409.2 -3,001.2 -3,001.2

2062 0.0 0.0 0.0 1,635.3 9,301.9 -3,109.2 -3,109.2

2063 0.0 0.0 0.0 1,607.3 9,196.0 -3,216.6 -3,216.6

2064 0.0 0.0 0.0 1,578.9 9,091.8 -3,323.4 -3,323.4

2065 0.0 0.0 0.0 1,550.2 8,988.7 -3,429.7 -3,429.7

2066 0.0 0.0 0.0 1,520.8 8,886.5 -3,535.7 -3,535.7

2067 0.0 0.0 0.0 1,490.9 8,785.3 -3,641.3 -3,641.3

2068 0.0 0.0 0.0 1,460.4 8,685.0 -3,746.7 -3,746.7

2069 0.0 0.0 0.0 1,429.1 8,585.5 -3,851.9 -3,851.9

2070 0.0 0.0 0.0 1,397.2 8,487.0 -3,956.9 -3,956.9

2071 0.0 0.0 0.0 1,364.6 8,388.8 -4,061.7 -4,061.7

2072 0.0 0.0 0.0 1,331.3 8,292.1 -4,166.3 -4,166.3

2073 0.0 0.0 0.0 1,297.3 8,196.2 -4,270.8 -4,270.8

2074 0.0 0.0 0.0 1,262.6 8,101.5 -4,375.1 -4,375.1

2075 0.0 0.0 0.0 1,227.2 8,007.1 -4,479.3 -4,479.3

2076 0.0 0.0 0.0 1,191.2 7,913.4 -4,583.2 -4,583.2

2077 0.0 0.0 0.0 1,154.6 7,820.3 -4,687.0 -4,687.0

2078 0.0 0.0 0.0 1,117.4 7,727.4 -4,790.5 -4,790.5

2079 0.0 0.0 0.0 1,079.6 7,635.8 -4,893.8 -4,893.8

2080 0.0 0.0 0.0 1,041.2 7,545.2 -4,996.8 -4,996.8

2081 0.0 0.0 0.0 1,002.3 7,455.5 -5,099.6 -5,099.6

2082 0.0 0.0 0.0 962.9 7,366.6 -5,202.1 -5,202.1

2083 0.0 0.0 0.0 923.0 7,278.4 -5,304.4 -5,304.4

2084 0.0 0.0 0.0 882.7 7,191.1 -5,406.3 -5,406.3

Total 2010-2084 0.0

Based on the Intermediate Assumptions of the 2010 Trustees Report Office of the Chief Actuary

Ultimate Real Trust Fund Yield of 2.9% Social Security Administration

March 2, 2011

Net OASDI Trust Fund Assets at End of Year

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.

Table 1a - General Fund Transfers, OASDI Trust Fund Assets, and Theoretical OASDI Assets

Calendar

Year

Proposal General Fund Transfers Present Value in Billions as of 1-1-2010

Proposal

Total OASDI

Trust Fund

Assets 

at End of Year

Theoretical Social Security1

with Borrowing Authority

Present Value in Billions as of 1-1- 2010

H.R. 797 "No Loopholes in Social Security Taxes Act": Introduced by Representative DeFazio
Year

Specified 

General Fund 

Transfers

Basic Changes

in OASDI

Cash Flow

Change

in Annual

Unified Budget

Cash Flow

Change in

Debt Held

by Public at

End of Year

Change

in Annual

Unified Budget

Balance

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

2010 0.0 0.0 0.0 0.0 0.0

2011 0.0 0.0 0.0 0.0 0.0

2012 0.0 56.4 56.4 -56.4 56.4

2013 0.0 64.4 64.4 -120.8 67.0

2014 0.0 69.4 69.4 -190.2 75.0

2015 0.0 73.7 73.7 -263.9 82.8

2016 0.0 77.8 77.8 -341.7 90.7

2017 0.0 81.3 81.3 -423.0 98.4

2018 0.0 84.3 84.3 -507.3 105.8

2019 0.0 86.7 86.7 -594.0 112.9

2020 0.0 88.7 88.7 -682.7 119.7

2021 0.0 90.5 90.5 -773.2 126.6

2022 0.0 92.3 92.3 -865.5 133.6

2023 0.0 94.0 94.0 -959.5 140.8

2024 0.0 95.7 95.7 -1,055.3 148.2

2025 0.0 97.5 97.5 -1,152.7 155.1

2026 0.0 99.3 99.3 -1,252.0 162.3

2027 0.0 101.4 101.4 -1,353.5 169.8

2028 0.0 103.5 103.5 -1,456.9 177.5

2029 0.0 105.8 105.8 -1,562.7 185.4

2030 0.0 108.1 108.1 -1,670.8 193.6

2031 0.0 110.8 110.8 -1,781.6 202.1

2032 0.0 111.8 111.8 -1,893.4 209.2

2033 0.0 110.7 110.7 -2,004.1 214.2

2034 0.0 109.5 109.5 -2,113.6 219.0

2035 0.0 108.3 108.3 -2,221.9 223.8

2036 0.0 107.2 107.2 -2,329.0 228.6

2037 0.0 106.1 106.1 -2,435.1 233.3

2038 0.0 105.0 105.0 -2,540.1 238.1

2039 0.0 103.9 103.9 -2,644.0 242.7

2040 0.0 102.8 102.8 -2,746.8 247.3

2041 0.0 101.7 101.7 -2,848.5 251.9

2042 0.0 100.7 100.7 -2,949.2 256.3

2043 0.0 99.6 99.6 -3,048.8 260.8

2044 0.0 98.5 98.5 -3,147.3 265.2

2045 0.0 97.5 97.5 -3,244.8 269.5

2046 0.0 96.4 96.4 -3,341.2 273.8

2047 0.0 95.4 95.4 -3,436.6 278.0

2048 0.0 94.3 94.3 -3,530.9 282.1

2049 0.0 93.3 93.3 -3,624.2 286.2

2050 0.0 92.2 92.2 -3,716.4 290.3

2051 0.0 91.2 91.2 -3,807.6 294.3

2052 0.0 90.2 90.2 -3,897.8 298.3

2053 0.0 89.1 89.1 -3,986.9 302.2

2054 0.0 88.1 88.1 -4,075.1 306.0

2055 0.0 87.1 87.1 -4,162.2 309.8

2056 0.0 86.1 86.1 -4,248.3 313.6

2057 0.0 85.1 85.1 -4,333.4 317.3

2058 0.0 84.1 84.1 -4,417.5 321.0

2059 0.0 83.2 83.2 -4,500.7 324.6

2060 0.0 82.2 82.2 -4,582.9 328.2

2061 0.0 81.3 81.3 -4,664.2 331.7

2062 0.0 80.3 80.3 -4,744.5 335.2

2063 0.0 79.4 79.4 -4,823.9 338.7

2064 0.0 78.5 78.5 -4,902.3 342.1

2065 0.0 77.5 77.5 -4,979.9 345.5

2066 0.0 76.6 76.6 -5,056.5 348.8

2067 0.0 75.7 75.7 -5,132.2 352.1

2068 0.0 74.8 74.8 -5,207.1 355.3

2069 0.0 73.9 73.9 -5,281.0 358.5

2070 0.0 73.1 73.1 -5,354.1 361.7

2071 0.0 72.2 72.2 -5,426.3 364.8

2072 0.0 71.3 71.3 -5,497.6 367.9

2073 0.0 70.5 70.5 -5,568.1 370.9

2074 0.0 69.6 69.6 -5,637.7 373.9

2075 0.0 68.8 68.8 -5,706.5 376.9

2076 0.0 68.0 68.0 -5,774.5 379.8

2077 0.0 67.1 67.1 -5,841.6 382.7

2078 0.0 66.3 66.3 -5,907.9 385.6

2079 0.0 65.5 65.5 -5,973.4 388.4

2080 0.0 64.7 64.7 -6,038.1 391.1

2081 0.0 63.9 63.9 -6,101.9 393.9

2082 0.0 63.1 63.1 -6,165.1 396.6

2083 0.0 62.3 62.3 -6,227.4 399.3

2084 0.0 61.6 61.6 -6,288.9 401.9

0.0 6,288.9 6,288.9

Based on Intermediate Assumptions of the 2010 Trustees Report. Office of the Chief Actuary

Ultimate Real Trust Fund Yield of 2.9% Social Security Administration

1

 Effects of tax provisions on the On-Budget are not reflected in this table.

H.R. 797 "No Loopholes in Social Security Taxes Act": Introduced by Representative DeFazio

March 2, 2011

Total 2010-84

Billions of Present Value Dollars as of 1-1-2010

Table 1b - OASDI Changes & Unified Budget Implications of Specified Plan Provision Effects on OASDI1 (Present Value Dollars)
Year

Specified General 

Fund Transfers

Basic Changes

in OASDI

Cash Flow

Change

in Annual

Unified Budget

Cash Flow

Change in

Debt Held

by Public at

End of Year

Change

in Annual

Unified Budget

Balance

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

2010 0.0 0.0 0.0 0.0 0.0

2011 0.0 0.0 0.0 0.0 0.0

2012 0.0 63.1 63.1 -64.5 64.5

2013 0.0 75.4 75.4 -144.7 80.2

2014 0.0 85.2 85.2 -238.9 94.2

2015 0.0 95.0 95.0 -347.9 109.0

2016 0.0 105.3 105.3 -473.3 125.4

2017 0.0 115.8 115.8 -616.4 143.1

2018 0.0 126.4 126.4 -778.5 162.0

2019 0.0 137.1 137.1 -960.9 182.5

Based on Intermediate Assumptions of the 2010 Trustees Report. Office of the Chief Actuary

Social Security Administration

Billions of Nominal Dollars

Table 1b.n - OASDI Changes & Unified Budget Implications of Specified Plan Porvision Effects on OASDI1 (Nominal Dollars)

1

 Effects of tax provisions on the On-Budget are not reflected in this table.

H.R. 797 "No Loopholes in Social Security Taxes Act": Introduced by Representative DeFazio

March 2, 2011
Cost

Expenditures

(Payable)

Tax

Income Cost

Expenditures

(Payable)

Tax

Income

(1) (2) (3) (4) (5) (6)

2010 4.84 4.84 4.56 4.84 4.84 4.56

2011 4.80 4.80 4.75 4.80 4.80 4.75

2012 4.76 4.76 4.77 4.76 4.76 5.15

2013 4.75 4.75 4.78 4.75 4.75 5.22

2014 4.78 4.78 4.80 4.78 4.78 5.26

2015 4.83 4.83 4.81 4.83 4.83 5.30

2016 4.90 4.90 4.84 4.90 4.90 5.36

2017 4.98 4.98 4.86 4.98 4.98 5.40

2018 5.08 5.08 4.88 5.08 5.08 5.44

2019 5.20 5.20 4.89 5.19 5.19 5.47

2020 5.30 5.30 4.89 5.30 5.30 5.49

2021 5.41 5.41 4.89 5.41 5.41 5.51

2022 5.51 5.51 4.88 5.50 5.50 5.52

2023 5.60 5.60 4.88 5.60 5.60 5.53

2024 5.68 5.68 4.88 5.68 5.68 5.55

2025 5.77 5.77 4.87 5.76 5.76 5.57

2026 5.84 5.84 4.87 5.83 5.83 5.58

2027 5.90 5.90 4.87 5.90 5.90 5.60

2028 5.96 5.96 4.87 5.96 5.96 5.63

2029 6.01 6.01 4.87 6.00 6.00 5.65

2030 6.05 6.05 4.86 6.04 6.04 5.67

2031 6.08 6.08 4.86 6.07 6.07 5.70

2032 6.10 6.10 4.86 6.10 6.10 5.71

2033 6.12 6.12 4.86 6.12 6.12 5.71

2034 6.13 6.13 4.85 6.12 6.12 5.71

2035 6.14 6.14 4.85 6.13 6.13 5.70

2036 6.14 6.14 4.85 6.12 6.12 5.70

2037 6.13 6.06 4.84 6.12 6.12 5.70

2038 6.11 4.84 4.84 6.10 6.10 5.69

2039 6.10 4.84 4.84 6.08 6.08 5.69

2040 6.08 4.83 4.83 6.06 6.06 5.68

2041 6.05 4.83 4.83 6.04 6.04 5.67

2042 6.03 4.82 4.82 6.02 6.02 5.67

2043 6.01 4.81 4.81 5.99 5.99 5.66

2044 5.99 4.81 4.81 5.97 5.97 5.66

2045 5.97 4.80 4.80 5.95 5.95 5.65

2046 5.95 4.79 4.79 5.94 5.94 5.64

2047 5.94 4.79 4.79 5.92 5.92 5.63

2048 5.92 4.78 4.78 5.90 5.90 5.63

2049 5.91 4.78 4.78 5.89 5.89 5.62

2050 5.89 4.77 4.77 5.87 5.87 5.61

2051 5.88 4.76 4.76 5.86 5.86 5.61

2052 5.87 4.76 4.76 5.85 5.85 5.60

2053 5.87 4.75 4.75 5.85 5.85 5.59

2054 5.87 4.75 4.75 5.84 5.84 5.59

2055 5.87 4.74 4.74 5.84 5.84 5.58

2056 5.87 4.74 4.74 5.84 5.84 5.57

2057 5.87 4.73 4.73 5.84 5.84 5.57

2058 5.87 4.73 4.73 5.84 5.84 5.56

2059 5.87 4.72 4.72 5.84 5.84 5.56

2060 5.87 4.71 4.71 5.84 5.84 5.55

2061 5.87 4.71 4.71 5.84 5.84 5.54

2062 5.87 4.70 4.70 5.84 5.84 5.54

2063 5.87 4.70 4.70 5.84 5.84 5.53

2064 5.87 4.69 4.69 5.84 5.84 5.53

2065 5.88 4.69 4.69 5.85 5.85 5.52

2066 5.88 4.68 4.68 5.85 5.85 5.51

2067 5.88 4.67 4.67 5.85 5.85 5.51

2068 5.89 4.67 4.67 5.86 5.86 5.50

2069 5.89 4.66 4.66 5.86 5.86 5.49

2070 5.90 4.66 4.66 5.87 5.87 5.49

2071 5.91 4.65 4.65 5.88 5.88 5.48

2072 5.92 4.65 4.65 5.88 5.88 5.48

2073 5.92 4.64 4.64 5.89 5.89 5.47

2074 5.93 4.64 4.64 5.90 5.90 5.47

2075 5.94 4.63 4.63 5.91 5.91 5.46

2076 5.95 4.63 4.63 5.92 5.92 5.45

2077 5.96 4.62 4.62 5.92 5.92 5.45

2078 5.97 4.62 4.62 5.93 5.93 5.44

2079 5.97 4.62 4.62 5.94 5.94 5.44

2080 5.98 4.61 4.61 5.95 5.95 5.44

2081 5.99 4.61 4.61 5.96 5.96 5.43

2082 6.00 4.61 4.61 5.97 5.97 5.43

2083 6.01 4.60 4.60 5.98 5.98 5.42

2084 6.02 4.60 4.60 5.99 5.99 5.42

H.R. 797 "No Loopholes in Social Security Taxes Act": Introduced by Representative DeFazio

Table 1c - Present Law and Proposal Cost, Expenditures, and Income: As Percent of Gross Domestic Product

March 2, 2011

Social Security Administration

Present Law OASDI Proposal OASDI

Calendar

Year

Based on Intermediate Assumptions of the 2010 Trustees Report. Office of the Chief Actuary
Year

Present Law OASDI

Trust Fund Assets /

Unfunded Obligation

Through End of Year

Changes 

in OASDI 

Income

Changes

in OASDI 

Cost

Basic

Changes

in OASDI

Cash Flow

Total Change

Through

End of Year

Proposal OASDI

Trust Fund Assets /

Unfunded Obligation

Through End of Year

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

2010 2,500.1 0.0 0.0 0.0 0.0 2,500.1

2011 2,493.9 0.0 0.0 0.0 0.0 2,493.9

2012 2,495.8 56.4 0.0 56.4 56.4 2,552.2

2013 2,500.7 64.4 0.0 64.4 120.8 2,621.5

2014 2,504.4 69.4 0.0 69.4 190.2 2,694.6

2015 2,502.6 73.7 0.0 73.7 263.9 2,766.5

2016 2,495.2 77.8 0.0 77.8 341.7 2,836.9

2017 2,478.0 81.3 -0.1 81.3 423.0 2,901.0

2018 2,448.8 84.2 -0.1 84.3 507.3 2,956.1

2019 2,404.4 86.6 -0.1 86.7 594.0 2,998.4

2020 2,344.3 88.5 -0.2 88.7 682.7 3,027.0

2021 2,269.2 90.2 -0.3 90.5 773.2 3,042.5

2022 2,180.2 91.9 -0.4 92.3 865.5 3,045.7

2023 2,078.2 93.5 -0.5 94.0 959.5 3,037.8

2024 1,964.7 95.2 -0.5 95.7 1,055.3 3,020.0

2025 1,840.6 96.9 -0.6 97.5 1,152.7 2,993.3

2026 1,707.4 98.7 -0.6 99.3 1,252.0 2,959.5

2027 1,566.5 100.7 -0.7 101.4 1,353.5 2,919.9

2028 1,419.1 102.7 -0.8 103.5 1,456.9 2,876.1

2029 1,266.6 104.9 -0.8 105.8 1,562.7 2,829.3

2030 1,110.6 107.3 -0.9 108.1 1,670.8 2,781.4

2031 951.9 109.9 -1.0 110.8 1,781.6 2,733.5

2032 791.4 110.8 -1.0 111.8 1,893.4 2,684.8

2033 629.9 109.6 -1.1 110.7 2,004.1 2,634.0

2034 468.5 108.3 -1.1 109.5 2,113.6 2,582.1

2035 308.0 107.1 -1.2 108.3 2,221.9 2,529.9

2036 149.0 105.9 -1.3 107.2 2,329.0 2,478.1

2037 -7.9 104.7 -1.3 106.1 2,435.1 2,427.1

2038 -162.2 103.6 -1.4 105.0 2,540.1 2,377.9

2039 -313.2 102.4 -1.5 103.9 2,644.0 2,330.8

2040 -460.7 101.3 -1.5 102.8 2,746.8 2,286.0

2041 -604.7 100.2 -1.6 101.7 2,848.5 2,243.8

2042 -745.2 99.0 -1.6 100.7 2,949.2 2,204.0

2043 -882.3 97.9 -1.7 99.6 3,048.8 2,166.5

2044 -1,016.3 96.8 -1.8 98.5 3,147.3 2,131.1

2045 -1,147.4 95.6 -1.8 97.5 3,244.8 2,097.4

2046 -1,275.9 94.5 -1.9 96.4 3,341.2 2,065.4

2047 -1,402.0 93.4 -2.0 95.4 3,436.6 2,034.6

2048 -1,525.6 92.3 -2.0 94.3 3,530.9 2,005.3

2049 -1,646.9 91.2 -2.1 93.3 3,624.2 1,977.2

2050 -1,766.0 90.1 -2.1 92.2 3,716.4 1,950.4

2051 -1,883.2 89.0 -2.2 91.2 3,807.6 1,924.4

2052 -1,998.8 87.9 -2.2 90.2 3,897.8 1,898.9

2053 -2,113.3 86.9 -2.3 89.1 3,986.9 1,873.6

2054 -2,226.7 85.8 -2.3 88.1 4,075.1 1,848.3

2055 -2,339.4 84.7 -2.4 87.1 4,162.2 1,822.8

2056 -2,451.4 83.7 -2.4 86.1 4,248.3 1,796.8

2057 -2,562.8 82.6 -2.5 85.1 4,333.4 1,770.6

2058 -2,673.5 81.6 -2.5 84.1 4,417.5 1,744.0

2059 -2,783.4 80.7 -2.5 83.2 4,500.7 1,717.3

2060 -2,892.6 79.7 -2.5 82.2 4,582.9 1,690.3

2061 -3,001.2 78.7 -2.6 81.3 4,664.2 1,662.9

2062 -3,109.2 77.7 -2.6 80.3 4,744.5 1,635.3

2063 -3,216.6 76.8 -2.6 79.4 4,823.9 1,607.3

2064 -3,323.4 75.9 -2.6 78.5 4,902.3 1,578.9

2065 -3,429.7 74.9 -2.6 77.5 4,979.9 1,550.2

2066 -3,535.7 74.0 -2.6 76.6 5,056.5 1,520.8

2067 -3,641.3 73.1 -2.6 75.7 5,132.2 1,490.9

2068 -3,746.7 72.2 -2.6 74.8 5,207.1 1,460.4

2069 -3,851.9 71.3 -2.6 73.9 5,281.0 1,429.1

2070 -3,956.9 70.5 -2.6 73.1 5,354.1 1,397.2

2071 -4,061.7 69.6 -2.6 72.2 5,426.3 1,364.6

2072 -4,166.3 68.7 -2.6 71.3 5,497.6 1,331.3

2073 -4,270.8 67.9 -2.6 70.5 5,568.1 1,297.3

2074 -4,375.1 67.1 -2.6 69.6 5,637.7 1,262.6

2075 -4,479.3 66.2 -2.5 68.8 5,706.5 1,227.2

2076 -4,583.2 65.4 -2.5 68.0 5,774.5 1,191.2

2077 -4,687.0 64.6 -2.5 67.1 5,841.6 1,154.6

2078 -4,790.5 63.8 -2.5 66.3 5,907.9 1,117.4

2079 -4,893.8 63.0 -2.5 65.5 5,973.4 1,079.6

2080 -4,996.8 62.2 -2.4 64.7 6,038.1 1,041.2

2081 -5,099.6 61.5 -2.4 63.9 6,101.9 1,002.3

2082 -5,202.1 60.7 -2.4 63.1 6,165.1 962.9

2083 -5,304.4 60.0 -2.4 62.3 6,227.4 923.0

2084 -5,406.3 59.2 -2.3 61.6 6,288.9 882.7

Total 2010-2084 6166.6 -122.4 6288.9

Based on Intermediate Assumptions of the 2010 Trustees Report. Office of the Chief Actuary

Social Security Administration

Ultimate Real Trust Fund Yield of 2.9%.

(Billions of Dollars, Present Value on 1-1-2010)

Table 1d - Change in Long-Range Trust Fund Assets / Unfunded Obligation

H.R. 797 "No Loopholes in Social Security Taxes Act": Introduced by Representative DeFazio

March 2, 2011
PETER A. DEFAZIO

4TH DßIRÌCI, OREGON

IRANSPORTATION AND

INFRASTRUCTURE

suBco[4MÍ]EÊs.

HIGHWAYSANO TRANSIT

BaN(rNG f'¡EMBEF

AVIAÍION

FAÌLFOADS

NATURAL RESOURCES

SUBCOMMIIIEES'

NATIONAL PARKS, FOFESTS, AND PUBLIC LANDS

ENEEGY AND fIIINEÂAL RESOURCES

¡

¡

[,nngrtßø ottllt @niteù $rtuttg ,,

Thsrgt of lßepreøentatíbeø

March 1, 2 011

Stephen C. Coss/ Chief Actuary

Office of the Chief Actuary

Social Security Administration

6401 Security Boufevard

700 Altmeyer

Baltimore, MD 21235

Dear Mr. Gos s,

I have recently lntroduced H.R. 79'7, L]ne No Loopholes in Social

Secur.ity Taxes Act. This leglsfation's principal .intention is to

achieve 75 year solvency for Social Security. It aims to do so by

applying Social Security FtCA tax to all income, includíng selfemployment income, aÌ:ove 9250,000 in addition to income under the

current cap. The cap woufd remain indexed to the AI{I while the

$250,000 wòuld be set in pface. This aflows the cap to. over the

years, approach $250,000 thus closing the non-taxable donut hole and

exposing alf income to Sociaf Security FTCA tax. For benefit

purposes, the cap indexed to the AWI would remain in place no matter

the amount of incorne being taxed. At no time woutd alf leve]s of

income be considered for benefit purposes. I would appreciate the

assistance of the Offíce of the Chief Actuary in assembling a report

that analyzes the effect on Social Security solvency that the bllÌ. as

specifically described ín this letter, woufd have.

Please contact Michaef Hayes on my staff if you have any

questions or need any clarifications. Thank you in advance for your

assistance.

PLEASE RESPOND TO:

2134 RawuFN HousE OFncE Bu LD Nc

WasHrNGroN, DC 20515-3704

12021 225 6416

405 EÀsr 8rH AVENUE,#2030

EUGENE, OF 97401

(541)465-6732

125 CENnaL AVENUÊ, 4350

Coos BaY, OR 97420

(s41)269 2609

612 SE JacKsoN SrFEEr, +9

RoSEBURG, OB 97470

15411440-3523

clefazio.house.gov

IHIS STATIONERY PRINTED ON PAPER MADE WIIH RECYCLED FIBERS
Page 1 of I

HR 797 IH

112th CONGR,ESS

lst Session

H. R.797

To amend the Intemal Revenue Code of 1986 to apply payroll taxes to remuneration up to the

contribution and benefit base and to remuneration in excess of $250,000.

IN THE HOUSE OF'REPRESENTATIVES

February l8,20ll

Mr. DEFAZIO introduced the following bill; which was referred to tlie Committee on Ways and Means

A BILL

To amend the Intemal Revenue Code of 1986 to apply payroll taxes to remuneration up to the

contribution and benefit base and to remuneration in excess of $250,000.

Be it enacted by the Senate and House of Representatives of the United States of America i.n

Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the 'No Loopholes in Social Security Taxes Act'.

SEC. 2. PAYROLL TAX ON REMUNERATION UP TO CONTRIBUTION AND l

BENEFIT BASE AND MORE THAN $25O,OOO.

(a) In General- Paragraph (1) of section 312i(a) ofthe Intemal Revenue Code of 1986 is amended l

by inserting after 'such calendar year.'the following: 'The preceding sentence shall apply only to

calendar years for which the cont¡ibution and benefit base (as so determined) is less than

$250,000, and, for such calendar years, only to so much ofthe remuneration paid to such

employee by such employer with respect to employment as does not exceed $250,000.'.

(b) Conforming Amendment- Paragraph (1) of section 3121 of such Code is amended by striking

'Act) to'and inserting'Act), or in excess of$250,000, to'.

(c) Effective Date- The amendments made by this section shall apply to remuneration paid after

December 31,201l.

END

http://www.congress.gov/cgi-1is/query/C?c112:.ltemp/-c112HjPREg 2123/2011