SOCIAL SECURITY

Office of the Chief Actuary

SOCIAL SECURITY ADMINISTRATION BALTIMORE, MD 21235-0001

February 10, 2016

The Honorable Sam Johnson

Chairman, Subcommittee on Social Security

Committee on Ways and Means

House of Representatives

Washington, D.C. 20515

Dear Mr. Johnson:

I am writing in response to your request for an estimate of the financial effects on Social Security 

of the proposal included in the President's Fiscal Year 2017 Budget applying a fee on petroleum 

products purchased in the U.S. The fee is part of the President’s 21st Century Clean 

Transportation Plan. We have not included the effects of other components of the plan in our 

estimates.

As described in the Budget, this proposal would phase in over the 6 years FY 2017 through FY

2022 a fee on petroleum products purchased in the U.S. equivalent to $10.25 per barrel of crude 

oil. Our understanding is that the fee would be assessed to the producer of the finished goods

(gasoline, motor oil, etc.) to be sold in the U.S. and would be remitted to the General Fund of the 

Treasury. We estimate that this fee would result in an additional increase in the all-items 

Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) of about 1 

percent in total over the 6 years the fee is phased in. This increase in CPI-W would result in 

increases in Social Security COLAs for December 2017 through December 2022 totaling 1 

percent more than if the fee were not enacted. 

We estimate that the increase in the COLAs due to enactment of this proposal would increase 

Old Age, Survivors, and Disability Insurance (OASDI) benefit payments in years through FY 

2026 by a total of about $50 billion Table 1, enclosed, provides annual and summarized longrange estimates of the effects of this proposal on OASDI actuarial status. Over the long-range 

period, we estimate that enactment of this provision would increase the long-range OASDI 

actuarial deficit by 0.03 percent of payroll. All estimates provided here are based on the 

intermediate assumptions of the 2015 Trustees Report.

We have consulted with staff at the Office of Management and Budget and the Department of the 

Treasury to gain a full understanding of the intent of this proposal. Individuals in our Office of 

the Chief Actuary who were instrumental in developing our estimates include Karen Glenn, Bob 

Weathers, Christopher Chaplain, Anthony Cheng, and Sven Sinclair. 
Page 2 – The Honorable Sam Johnson

We hope this analysis will be helpful. Please let me know if we may provide further assistance.

Sincerely,

Stephen C. Goss

Chief Actuary

Enclosure
Year Cost Rate

Income

Rate

Annual

Balance Cost Rate

Income

Rate

Annual

Balance

2015 14.13 12.82 -1.31 308 0.00 0.00 0.00

2016 13.88 12.88 -1.00 298 0.00 0.00 0.00

2017 13.89 12.91 -0.98 280 0.00 0.00 0.00

2018 13.99 12.94 -1.05 264 0.02 0.00 -0.02

2019 14.13 12.95 -1.18 247 0.04 0.00 -0.04

2020 14.29 12.97 -1.33 232 0.07 0.00 -0.06

2021 14.43 12.99 -1.45 216 0.09 0.00 -0.08

2022 14.63 13.02 -1.61 201 0.11 0.00 -0.10

2023 14.85 13.04 -1.82 185 0.13 0.01 -0.12

2024 15.08 13.07 -2.02 169 0.13 0.01 -0.12

2025 15.29 13.09 -2.20 153 0.12 0.01 -0.12

2026 15.48 13.10 -2.38 137 0.12 0.01 -0.11

2027 15.67 13.12 -2.55 120 0.11 0.01 -0.11

2028 15.86 13.13 -2.72 104 0.11 0.01 -0.10

2029 16.03 13.15 -2.88 87 0.10 0.01 -0.10

2030 16.19 13.16 -3.03 70 0.09 0.00 -0.09

2031 16.33 13.17 -3.16 52 0.09 0.00 -0.08

2032 16.46 13.18 -3.28 34 0.08 0.00 -0.08

2033 16.56 13.19 -3.37 14 0.08 0.00 -0.07

2034 16.62 13.19 -3.43 ---- 0.07 0.00 -0.07

2035 16.69 13.20 -3.49 ---- 0.07 0.00 -0.06

2036 16.74 13.21 -3.53 ---- 0.06 0.00 -0.06

2037 16.77 13.21 -3.56 ---- 0.06 0.00 -0.05

2038 16.78 13.21 -3.57 ---- 0.05 0.00 -0.05

2039 16.77 13.22 -3.56 ---- 0.05 0.00 -0.04

2040 16.75 13.22 -3.54 ---- 0.04 0.00 -0.04

2041 16.73 13.22 -3.51 ---- 0.04 0.00 -0.04

2042 16.70 13.22 -3.48 ---- 0.03 0.00 -0.03

2043 16.67 13.22 -3.45 ---- 0.03 0.00 -0.03

2044 16.64 13.22 -3.43 ---- 0.03 0.00 -0.02

2045 16.62 13.22 -3.40 ---- 0.02 0.00 -0.02

2046 16.59 13.22 -3.38 ---- 0.02 0.00 -0.02

2047 16.58 13.22 -3.36 ---- 0.02 0.00 -0.02

2048 16.56 13.22 -3.34 ---- 0.01 0.00 -0.01

2049 16.55 13.22 -3.33 ---- 0.01 0.00 -0.01

2050 16.55 13.22 -3.33 ---- 0.01 0.00 -0.01

2051 16.56 13.22 -3.34 ---- 0.01 0.00 -0.01

2052 16.58 13.22 -3.36 ---- 0.01 0.00 -0.01

2053 16.61 13.23 -3.38 ---- 0.01 0.00 -0.01

2054 16.65 13.23 -3.42 ---- 0.00 0.00 0.00

2055 16.69 13.23 -3.46 ---- 0.00 0.00 0.00

2056 16.74 13.24 -3.51 ---- 0.00 0.00 0.00

2057 16.80 13.24 -3.55 ---- 0.00 0.00 0.00

2058 16.85 13.24 -3.60 ---- 0.00 0.00 0.00

2059 16.90 13.25 -3.65 ---- 0.00 0.00 0.00

2060 16.95 13.25 -3.70 ---- 0.00 0.00 0.00

2061 17.01 13.26 -3.75 ---- 0.00 0.00 0.00

2062 17.06 13.26 -3.80 ---- 0.00 0.00 0.00

2063 17.11 13.26 -3.85 ---- 0.00 0.00 0.00

2064 17.16 13.27 -3.90 ---- 0.00 0.00 0.00

2065 17.22 13.27 -3.95 ---- 0.00 0.00 0.00

2066 17.27 13.27 -4.00 ---- 0.00 0.00 0.00

2067 17.33 13.28 -4.05 ---- 0.00 0.00 0.00

2068 17.39 13.28 -4.11 ---- 0.00 0.00 0.00

2069 17.45 13.28 -4.16 ---- 0.00 0.00 0.00

2070 17.50 13.29 -4.21 ---- 0.00 0.00 0.00

2071 17.55 13.29 -4.26 ---- 0.00 0.00 0.00

2072 17.60 13.29 -4.30 ---- 0.00 0.00 0.00

2073 17.63 13.30 -4.34 ---- 0.00 0.00 0.00

2074 17.66 13.30 -4.36 ---- 0.00 0.00 0.00

2075 17.68 13.30 -4.38 ---- 0.00 0.00 0.00

2076 17.70 13.30 -4.40 ---- 0.00 0.00 0.00

2077 17.70 13.30 -4.40 ---- 0.00 0.00 0.00

2078 17.71 13.30 -4.40 ---- 0.00 0.00 0.00

2079 17.71 13.30 -4.40 ---- 0.00 0.00 0.00

2080 17.71 13.30 -4.41 ---- 0.00 0.00 0.00

2081 17.71 13.30 -4.41 ---- 0.00 0.00 0.00

2082 17.73 13.30 -4.42 ---- 0.00 0.00 0.00

2083 17.75 13.30 -4.44 ---- 0.00 0.00 0.00

2084 17.78 13.31 -4.47 ---- 0.00 0.00 0.00

2085 17.81 13.31 -4.50 ---- 0.00 0.00 0.00

2086 17.85 13.31 -4.54 ---- 0.00 0.00 0.00

2087 17.89 13.31 -4.57 ---- 0.00 0.00 0.00

2088 17.93 13.32 -4.61 ---- 0.00 0.00 0.00

2089 17.97 13.32 -4.65 ---- 0.00 0.00 0.00

2090 18.01 13.32 -4.69 ---- 0.00 0.00 0.00

Cost Rate Income Rate

Actuarial 

Balance

Change in 

Cost rate

Change in 

Income Rate

Change in 

Actuarial

Balance

16.58% 13.87% -2.72% 2033 0.04% 0.00% -0.03%

1 Under present law the year of Trust Fund reserve depletion is 2034

February 10, 2016

Summarized Rates: OASDI

Year of reserve 

depletion1

Summarized Rates: OASDI

2015 - 2089

Based on Intermediate Assumptions of the 2015 Trustees Report Office of the Chief Actuary

Social Security Administration

Expressed as a percentage of present-law

taxable payroll Trust Fund

Ratio

1-1-year

Expressed as a percentage of present-law

taxable payroll

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

Proposal Change from Present Law

Estimated Effect of Proposal in the President's FY2017 Budget to Phase in a Fee on Petroleum Products Purchased in the U.S. that Would Increase COLAs 

for December 2017 through December 2022 by a Total of About 1 Percent