Social Security

Memorandum Refer to: TCA

Date: October 8, 2003

To: Peter Diamond, Professor, Massachusetts Institute of Technology

Peter Orszag, Senior Fellow, Brookings Institution

From: Stephen C. Goss, Chief Actuary 

Subject: Estimates of Financial Effects for a Proposal to Restore Solvency to the 

Social Security Program--INFORMATION

This memorandum provides a description of and financial estimates of the effect of a proposal 

that you have developed. The description that follows represents our understanding of your 

intent for the provisions of this proposal. Development of the specifics of these provisions and 

the estimates presented here were only possible through the creativity and extraordinary efforts 

of Jason Schultz, Alice Wade, Chris Chaplain, Seung An, Michael Clingman, Lesley Reece, Bill 

Piet, and many others in the Office of the Chief Actuary.

This proposal would, through a combination of increases in taxes and coverage, reductions in the 

general growth in benefit levels, and certain enhancements to benefit protections, restore 

solvency to the OASDI program over the 75-year projection period under the intermediate 

assumptions of the 2003 Trustees Report. Moreover, as the projected trend in the ratio of Trust 

Fund assets to the annual cost of the program would be stabilized and even rising slowly at the 

end of the period, the OASDI program would be made sustainably solvent under these 

assumptions for the foreseeable future.

The balance of this memorandum provides a detailed description of our understanding of the 

provisions of the proposal, followed by a description of the financial effects of enactment of the 

proposal, as indicated in the attached tables.
2

I. Provisions of the Proposal

Provision 1: Mortality adjustment

Under this provision, the Social Security Administration would compute successive adjustments 

to the PIA formula factors (90, 32, 15) and the OASDI payroll tax rates beginning with 2012. 

The first ratio adjustment factors would be computed in 2009, with ratios of values from the 

2009 Trustees Report to values from the 2008 Trustees Report. The annual calculation would be 

done in October of each year 2009 and later as described below.

Compute the ratio of two expected present values of lifetime retirement benefits starting at the 

NRA of an individual who will attain age 59 in the current year (2009). Use the interest rates for 

the current Trustees Report for both present values. The numerator of the ratio would be the 

present value reflecting mortality from the period life table of the prior year’s (2008) Trustees 

Report for the year TRyear -3 (2005). The denominator of the ratio would be based on mortality 

from the life table of the current (2009) Trustees Report for TRYear -3 (2006). Based on the 

intermediate projections of the 2003 Trustees Report, this ratio is expected to average about 

0.9976 over the next 75 years. The PIA multiplicative factor applicable for those becoming 

eligible in the third following year (2012) would be one half of the change reflected in the ratio 

of expected present value amounts, or an average reduction of about 0.12 percent per year. 

Compute the tax-rate multiplicative factor using the "85 percent" rule: 

tax rate multiplier=(1+.85*(1-PIA multiplicative factor)) and apply that multiplier to the tax rates 

for the second following year, to determine the tax rates applicable for the third following year.

For years where the NRA will be changing for those who attain 59 in that year, (a) retain the tax 

rate multiplier from step 1; (b) for the PIA multiplier, evaluate the effect on benefits at the NRA 

from the change in the NRA and set PIA multiplier=1 for those years if the effect onbenefits 

from the NRA increase is larger than the effect on benefits at the NRA from step 1; 

if the effect from step 1 is larger, then reduce the PIA multiplier from step 1 to net out the effect 

of the NRA increase. For years of new benefit eligibility (at age 62) 2017 through 2022, the 

normal retirement age increase in current law is expected to exceed the reduction indicated by 

the ratios described above, and so the PIA multiplier is expected to be 1 for these years.

Implementation of this provision for all OASDI benefits would increase the OASDI long-range 

actuarial balance by an amount estimated to be 0.55 percent of taxable payroll. 

Provision 2: Taxable maximum earnings base

Increase the maximum taxable earnings base by an additional 0.5% (by a factor of 1.005) for 

years 2005 through 2063 so that the percentage of OASDI covered earnings that falls below the 

maximum taxable amount would be projected to be 87 percent for years 2063 and later under the 

intermediate assumptions of the 2003 Trustees Report. Implementation of this provision would 

increase the OASDI long-range actuarial balance by an amount estimated to be 0.25 percent of 

taxable payroll. 
3

Provision 3: Upper bracket PIA factor

Reduce the 15 percent PIA factor by 0.25 percentage point each year 2012 through 2031. The 

PIA factor would thus decline to 10 percent for beneficiaries newly eligible in years 2031 and 

later. This modification would be applied to the PIA factor before other adjustments described in 

this proposal. Implementation of this provision would increase the OASDI long-range actuarial 

balance by an amount estimated to be 0.18 percent of taxable payroll. 

Provision 4: State and local workers 

Cover all new State and local government employees hired in 2008 or later under the OASDI 

program. Implementation of this provision would increase the OASDI long-range actuarial 

balance by an amount estimated to be 0.19 percent of taxable payroll. 

Provision 5: “Legacy charge”

Apply a 3-percent tax rate (1.5 for employers and employees each, and 3 percent for the self 

employed) to all OASDI covered earnings above the OASDI taxable maximum amount, as 

modified above. Benefit levels would not reflect the additional earnings subject to taxation. 

Implementation of this provision would increase the OASDI long-range actuarial balance by an 

incremental amount (after the effects of provisions 2 and 4 above) estimated to be 0.55 percent 

of taxable payroll. 

Provision 6: Low-Earner PIA Enhancement 

This provision would increase the PIA for workers becoming newly eligible for benefits in 2012 

and later who have more than 20 years of work (or work for more than half the years since 

reaching age 22) at a relatively low earnings level. The provision would raise the PIA by 11.9 

percent for a retiree becoming eligible in 2012 with 35 years of full-time work at the minimum 

wage level.

1

 This would raise the PIA for this retiree to the projected aged poverty level for 

2012. 

The provision would provide the same 11.9-percent increase for 35-year workers with average 

earnings below that of the 35-year minimum wage worker. This 11.9 percent increase would be 

reduced for 35-year workers with higher career-average earnings levels (AIME), reaching 0 for 

those with AIMEs at the level of the SSA average wage index for the second year prior to their 

eligibility. For workers with more than 35 years of work, the percentage increase is maintained 

 

1

 The “minimum wage worker” is assumed to work 2,000 hours each year at a minimum hourly 

wage rate of $5.15 in 2003 and indexed thereafter by growth in the Social Security average wage 

index. The minimum wage worker is assumed not to work after the calendar year in which age 

60 is attained.
4

at the same level as specified for workers with the same AIME level and only 35 years of work. 

However, the percentage increase is reduced for workers with fewer than 35 years of work, 

reaching 0 for those with 20 or fewer years of work. Thus, no enhancement is provided by this 

provision for retirees with 20 or fewer years of employment. The year-of-work requirements 

would be “scaled” to the length of the elapsed period from age 22 to benefit eligibility for 

workers who become disabled or die before reaching age 62.2 The incremental effect of this 

provision after provisions 1 and 3 would be to reduce the size of the long-range OASDI actuarial 

balance by an estimated 0.14 percent of taxable payroll. 

The table below illustrates the effect of the benefit enhancement for workers with low earnings.

Effect of Provision 6: Percentage Increase in PIA for Retirees with 

No Period of Disability, New Eligibility in 2012 or Later

Average Earnings Level in Years Worked (2004 wage levels)

Number of Quarters of

Minimum

Wage Low 

Minimum

Wage X 2 Medium High Maximum

Years of Coverage $5,000 $11,139 $16,291 $22,277 $36,203 $57,924 $88,500

Work (QCs)

Percentage Increase in PIA Due to Provision 6 

10 40 0 0 0 0 0 0 0

15 60 0 0 0 0 0 0 0

20 80 0 0 0 0 0 0 0

25 100 4.0 4.0 3.9 3.2 1.6 0 0

30 120 7.9 7.9 7.0 5.4 1.6 0 0

35 140 11.9 11.9 9.5 6.6 0 0 0

40 160 11.9 11.9 9.5 6.6 0 0 0

Based on intermediate assumptions of the 2003 Trustees Report.

The benefit enhancement under this provision would be computed according to the following 

formula:

For all workers whose AIME is less than twice the AIME for a medium scaled worker, the PIA 

is multiplied by

1+ applicable percentage × AIME factor × coverage factor.

 

2

 For example, the PIA of a 21-year minimum wage worker, who becomes disabled at age 46 in 

2012 or later, would be increased 11.9 percent because this worker had OASDI covered earnings 

in seven eighths of the 24 elapsed years.
5

In the above formula,

• "Applicable percentage" is equal to 11.9 percent for beneficiaries initially eligible in 2012 

and later;

• "AIME factor" is equal to 

if AIME A.

if M AIME A

if AIME M

0

(A - AIME)/(A - M) 

1

≥

< <

≤











Here, 

A = AIME of a scaled medium worker and

M = AIME for a 35-year minimum wage worker. 

• "Coverage factor" is equal to

if QCs 3.5 elapsed years.

if 2 elapsed years QCs 3.5 elapsed years

if QCs 2 elapsed years

 

1

1 (QCs- 3.5 elapsed years)/ela psed years

0

≥ ×

× < < ×

≤ ×











+ ×

In the above formula for the coverage factor, "QCs" represents the number of quarters of 

coverage earned by the worker prior to benefit eligibility. "Elapsed years" represents the number 

of years starting with the year the worker attains age 22 through the year prior to benefit 

eligibility, excluding periods of disabled worker entitlement.

Provision 7: 75-Percent of Couple Benefit for Aged Widow/Widowers

This provision applies to a surviving spouse who is eligible for both a worker benefit and an 

aged surviving spouse benefit. This provision would provide, beginning in 2012, the option to 

receive 75 percent of the benefit that the married couple would be receiving if both were still 

alive. Calculation of the couple benefit would reflect all age-related reductions for such benefits. 

If the deceased spouse is not already entitled for OASDI benefits at death, then it will be 

assumed that the deceased spouse would have become entitled for benefits on the date of death, 

or the earliest eligibility date, if later. The potential benefit for survivors under this provision 

would be limited to what the survivor would receive as a retired worker beneficiary with the 

average Primary Insurance Amount for all worker beneficiaries with benefits in current payment 

in the year of eligibility for this provision. Implementation of this provisionwould increase the 

OASDI actuarial deficit by an estimated 0.08 percent of taxable payroll.

Provision 8: Residual legacy benefit and tax adjustments

This provision has three parts. It is designed to provide sufficient additional revenue and benefit 

reduction so that, in conjunction with all other provisions of this proposal, the OASDI program 
6

would be restored to solvency for the 75-year long-range period, and that this solvency would 

meet the criteria for sustainable solvency.

1. For years 2023 and later, reduce the three PIA formula factors annually by an additional 0.30

percent (multiply by the factor 0.997). 

2. For years 2023 and later, increase the combined OASDI payroll tax rate annually by 0.255

percent (multiply by the factor 1.00255). This annual increase is 85 percent as large as the

annual decrease applied to PIA factors.

3. For years 2023 and later, increase the 3-percent legacy payroll tax rate (applicable for 

covered earnings in excess of the taxable maximum, see provision 5) annually by 0.51

percent (multiply by the factor 1.0051). This increase is specified to be twice the increase 

applied to the basic payroll tax rate applicable to OASDI covered earnings below the taxable 

maximum. 

The estimated incremental effect of provision 8 on the long-range OASDI actuarial balance after

application of provisions 1-7 is 0.97 percent of taxable payroll.

Provision 9: Disability benefits

Compute a 75-year cost saving (present value for 2003-77) from applying all benefit changes in 

Provisions 1-8 to disabled workers and their auxiliary beneficiaries in 2012 and thereafter (the 

quarters of coverage necessary to receive the low-earner enhanced benefit would be scaled for 

disabled workers). 

This provision is intended to provide an increment to benefits payable to beneficiaries under the 

DI program that will accumulate throughout their period of entitlement to such benefits, and will 

convey to any continuation of benefits payable under the OASI program after the death or 

conversion (at NRA) of the disabled worker. The increment is designed so that the net present 

value of the cost of such increments over the 75-year period 2003-77 would equal the net present 

value of the benefit reductions from Provisions 1-8 applied to all disabled worker beneficiaries 

and their auxiliaries (see above). 

The provision would apply a “super-COLA” to disabled worker beneficiaries and their 

auxiliaries by increasing PIA for all DI beneficiaries by a factor of 1.009 (or 0.9 percent), applied 

cumulatively for each year of benefit receipt under the DI program, in 2012 and thereafter. 

Super COLAs received while a disabled worker beneficiary would be retained after conversion 

to retired worker status at NRA (or after the death of the worker), but no further super COLAs 

would be earned after such conversion or death. The excess of the super-COLA over the COLA 

will be treated as an increase in PIA for purposes of all auxiliary benefits and subsequent 

survivor benefits based on the worker’s record. 

The super COLA as computed above would also apply for years of benefit receipt as a child

survivor or as a surviving spouse with an entitled child in care. 
7

The estimated incremental effect of provision 9 on the long-range OASDI actuarial balance after 

application of provisions 1-8 is a reduction in the size of the long-range OASDI actuarial balance 

of 0.21 percent of taxable payroll.

II. Estimated Financial Effects of the Proposal

The attached tables provide estimates of the effects of enactment of this proposal on the actuarial 

status of the OASDI program, on the Federal Government Unified Budget, and on the cash flow 

between the combined OASDI Trust Funds and the General Fund of the U.S. Treasury over the 

next 75 years. All estimates are based on the intermediate assumptions of the 2003 OASDI 

Trustees Report.

Table 1 indicates that the long-range OASDI actuarial balance would be increased by an 

estimated 2.00 percent of taxable payroll, from a deficit of 1.92 percent of payroll under current 

law to a positive balance of 0.09 percent of payroll with enactment of the proposal. Expressed 

on a present-value basis as of the beginning of 2003, the 75-year unfunded obligation of $3.5 

trillion for the OASDI program under current law would be replaced by an estimated combined 

Trust Fund balance at the end of the period of $0.5 trillion in present value discounted to January 

1, 2003. Moreover, the solvency for the 75-year long range period would be deemed sustainable 

for the foreseeable future as indicated by the stable ratio of Trust Fund Assets to annual program 

cost (TFR) at the end of the period. The pattern of annual OASDI balances at the end of the 

period indicates that a rising TFR might be expected beyond the 75-year period if the provisions 

of the proposal are extended.

Table 1a provides a comparison of estimated combined OASDI Trust Fund assets at the end of 

each year under current law and under the proposal in constant 2003 dollars. Under the proposal, 

Trust Fund assets are projected to be rising in constant dollars at the end of the period. This table 

also provides a comparison of the estimates of OASDI effective taxable payroll under current 

law and under the proposal in constant 2003 dollars. By 2077, the effective taxable payroll is 

projected to be increased by over 12 percent. 

Table 1b provides the estimated effect of enactment of the proposal on the Federal Government 

Unified Budget balance. The change in the annual unified budget cash flow would be positive 

for all years starting 2005. As a result, the proposal would have a substantial impact on the 

amount of Federal debt held by the public by the end of the period. This value, like the change 

in the annual Unified Budget balance as a result of the proposal, reflects the cumulative effects 

of reduced service on the debt under the proposal. 

Table 1c provides a comparison of the annual cash flow from the combined OASDI Trust Funds

to the General Fund of the Treasury under the proposal, and under a “Theoretical Social Security 

with PAYGO Transfers”. Under this Theoretical Social Security, it is assumed that the law is 

changed so that the General Fund would make transfers to the Trust Funds as needed just 

sufficient to permit continued full payment of scheduled benefits after the exhaustion of the Trust 

Fund assets in 2042. Values are shown as a percentage of payroll (equal to the annual balances 
8

in table 1), in current (nominal) dollars, in present value discounted to January 1, 2003, and in 

constant 2003 dollars. The total cash flow for the period 2003 through 2077 is indicated in 

present value. Under the Theoretical Social Security with PAYGO Transfers, the total cash flow 

needed from the General Fund would be $4.9 trillion, that is, $3.5 trillion in transfers in addition 

to the $1.4 trillion for redemption of assets held by the Trust Funds at the beginning of the 

period. Under the proposal, net cash flow from the General Fund is estimated at $0.9 trillion for 

the period, or $4 trillion less than under the Theoretical Social Security with PAYGO Transfers.

Stephen C. Goss

Attachments
Table 1 Projected OASDI Financial Status under Diamond-Orszag Propopsal

 With Ult Real TF Int Rate of 3.0

OASDI

Cost Income Annual TFR Contrib

Year Rate Rate Balance 1-1-yr Rate

2003 10.89 12.70 1.81 288 12.4

2004 10.82 12.69 1.88 309 12.40

2005 10.27 12.69 2.43 330 12.40

2006 10.18 12.69 2.51 357 12.40

2007 10.18 12.71 2.53 383 12.40

2008 10.21 12.72 2.51 408 12.40

2009 10.28 12.73 2.45 432 12.40

2010 10.39 12.75 2.36 454 12.40

2011 10.53 12.81 2.28 474 12.40

2012 10.78 12.82 2.04 489 12.41

2013 11.00 12.85 1.85 502 12.42

2014 11.25 12.88 1.63 513 12.44

2015 11.51 12.91 1.40 522 12.45

2016 11.81 12.94 1.13 527 12.46

2017 12.12 12.97 0.85 529 12.48

2018 12.45 13.01 0.56 529 12.49

2019 12.78 13.04 0.26 527 12.51

2020 13.12 13.07 -0.05 522 12.52

2021 13.48 13.11 -0.37 515 12.54

2022 13.82 13.14 -0.68 507 12.55

2023 14.12 13.21 -0.91 498 12.60

2024 14.42 13.28 -1.14 488 12.65

2025 14.70 13.34 -1.36 478 12.69

2026 14.96 13.41 -1.55 468 12.74

2027 15.21 13.47 -1.73 457 12.79

2028 15.44 13.54 -1.90 445 12.84

2029 15.64 13.60 -2.03 434 12.89

2030 15.81 13.66 -2.14 423 12.94

2031 15.95 13.72 -2.22 412 12.99

2032 16.06 13.78 -2.28 401 13.04

2033 16.16 13.84 -2.32 390 13.08

2034 16.23 13.90 -2.33 380 13.13

2035 16.27 13.95 -2.32 370 13.18

2036 16.30 14.01 -2.30 360 13.23

2037 16.31 14.06 -2.25 351 13.28

2038 16.32 14.11 -2.21 343 13.33

2039 16.32 14.16 -2.15 334 13.38

2040 16.31 14.22 -2.09 326 13.43

2041 16.30 14.27 -2.03 319 13.48

2042 16.28 14.32 -1.96 312 13.53

2043 16.28 14.37 -1.91 304 13.58

2044 16.28 14.42 -1.86 298 13.63

2045 16.28 14.47 -1.81 291 13.68

2046 16.29 14.53 -1.76 284 13.73

2047 16.29 14.58 -1.72 278 13.78

2048 16.31 14.63 -1.68 272 13.83

2049 16.33 14.68 -1.64 266 13.88

2050 16.34 14.74 -1.61 260 13.93

2051 16.37 14.79 -1.58 254 13.98

2052 16.39 14.84 -1.55 248 14.03

2053 16.42 14.90 -1.52 243 14.08

2054 16.44 14.95 -1.49 237 14.13

2055 16.46 15.01 -1.46 232 14.18

2056 16.49 15.06 -1.43 226 14.23

2057 16.51 15.11 -1.40 221 14.28

2058 16.52 15.17 -1.36 216 14.33

2059 16.53 15.22 -1.31 212 14.38

2060 16.54 15.27 -1.26 207 14.43

2061 16.54 15.32 -1.21 203 14.48

2062 16.54 15.38 -1.16 199 14.53

2063 16.54 15.43 -1.11 195 14.58

2064 16.54 15.48 -1.06 192 14.63

2065 16.54 15.53 -1.01 189 14.69

2066 16.55 15.59 -0.96 186 14.74

2067 16.55 15.64 -0.91 183 14.79

2068 16.55 15.69 -0.86 181 14.84

2069 16.55 15.75 -0.81 178 14.89

2070 16.56 15.80 -0.76 177 14.94

2071 16.56 15.85 -0.71 175 14.99

2072 16.56 15.90 -0.66 174 15.05

2073 16.56 15.96 -0.60 173 15.10

2074 16.55 16.01 -0.55 172 15.15

2075 16.55 16.06 -0.49 172 15.20

2076 16.54 16.11 -0.43 172 15.25

2077 16.54 16.17 -0.37 172 15.31

2078 16.53 16.22 -0.31 173 15.36

 Summarized

CostRt IncRt ActBal Change in

2003 OASDI OASDI OASDI ActBal

-2077 14.44 14.52 0.09 2.00

Office of the Actuary

Based on Intermediate Assumptions of the 2003 Trustees Report Social Security Administration

 With Ult Real Int Rate of 3 October 6, 2003
Table 1 a Comparison of Trust Fund Assets and Effective Taxable Payroll for the Diamond-Orszag Proposal

OASDI Trust Fund Assets (EOY) OASDI Effective Taxable Payroll

Year Present Law Proposal Present Law Proposal

(In billions of Constant 2003 Dollars)

2003 1,543 1,543 4,387 4,387

2004 1,683 1,683 4,504 4,504

2005 1,833 1,859 4,628 4,838

2006 1,990 2,045 4,749 4,968

2007 2,154 2,240 4,860 5,090

2008 2,323 2,444 4,967 5,218

2009 2,493 2,654 5,069 5,344

2010 2,664 2,868 5,167 5,465

2011 2,835 3,087 5,261 5,582

2012 3,001 3,301 5,348 5,691

2013 3,161 3,511 5,439 5,800

2014 3,312 3,717 5,526 5,905

2015 3,452 3,915 5,611 6,008

2016 3,579 4,104 5,694 6,109

2017 3,691 4,281 5,779 6,209

2018 3,786 4,444 5,862 6,312

2019 3,863 4,594 5,948 6,414

2020 3,921 4,728 6,033 6,516

2021 3,957 4,844 6,120 6,619

2022 3,971 4,941 6,206 6,721

2023 3,964 5,023 6,292 6,825

2024 3,936 5,091 6,379 6,930

2025 3,885 5,143 6,467 7,036

2026 3,813 5,181 6,557 7,144

2027 3,718 5,205 6,648 7,253

2028 3,601 5,214 6,741 7,365

2029 3,461 5,211 6,836 7,480

2030 3,300 5,196 6,933 7,597

2031 3,119 5,172 7,033 7,716

2032 2,917 5,139 7,134 7,837

2033 2,696 5,099 7,236 7,960

2034 2,457 5,053 7,340 8,086

2035 2,200 5,004 7,445 8,213

2036 1,925 4,951 7,552 8,342

2037 1,634 4,898 7,660 8,473

2038 1,326 4,843 7,769 8,601

2039 1,001 4,788 7,880 8,732

2040 661 4,734 7,990 8,862

2041 303 4,681 8,101 8,993

2042 -- 4,629 8,214 9,126

2043 -- 4,578 8,327 9,256

2044 -- 4,528 8,440 9,388

2045 -- 4,478 8,555 9,521

2046 -- 4,428 8,669 9,653

2047 -- 4,378 8,784 9,787

2048 -- 4,328 8,900 9,922

2049 -- 4,277 9,018 10,058

2050 -- 4,225 9,136 10,196

2051 -- 4,173 9,256 10,335

2052 -- 4,119 9,377 10,475

2053 -- 4,064 9,499 10,617

2054 -- 4,007 9,623 10,762

2055 -- 3,950 9,749 10,908

2056 -- 3,891 9,877 11,053

2057 -- 3,832 10,008 11,199

2058 -- 3,773 10,140 11,348

2059 -- 3,715 10,274 11,499

2060 -- 3,658 10,409 11,651

2061 -- 3,603 10,546 11,805

2062 -- 3,550 10,685 11,962

2063 -- 3,499 10,826 12,120

2064 -- 3,450 10,967 12,280

2065 -- 3,405 11,111 12,441

2066 -- 3,362 11,256 12,604

2067 -- 3,322 11,402 12,769

2068 -- 3,285 11,550 12,936

2069 -- 3,251 11,699 13,105

2070 -- 3,222 11,850 13,274

2071 -- 3,196 12,002 13,446

2072 -- 3,175 12,156 13,619

2073 -- 3,159 12,311 13,794

2074 -- 3,150 12,468 13,972

2075 -- 3,146 12,627 14,151

2076 -- 3,149 12,788 14,332

2077 -- 3,159 12,950 14,515

2078 -- 3,178 13,115 14,701

1/ Based on Intermediate Assumptions of the 2003 Trustees Report Office of the Actuary

 With Ult Real Int Rate of 3 Social Security Administration

 October 6, 2003
Table 1 b Projected Unified Budget Effect of Diamond-Orszag Proposal

 Change in Change Change in

 Change Annual in Debt Annual

 in OASDI UnifBudg Held by UnifBudg

 Year CashFlow CashFlow Public 1/ Balance

 (EOY)

(In billions of Constant 2003 Dollars)

2004 0.0 0.0 0.0 0.0

2005 25.2 25.2 -26.0 26.0

2006 27.3 27.3 -54.9 29.7

2007 28.7 28.7 -86.2 32.9

2008 31.3 31.3 -121.1 37.4

2009 34.1 34.1 -160.1 42.5

2010 36.9 36.9 -203.1 47.7

2011 41.0 41.0 -251.7 54.5

2012 38.3 38.3 -298.9 54.5

2013 40.6 40.6 -349.8 59.7

2014 42.6 42.6 -404.3 64.7

2015 44.4 44.4 -462.3 69.8

2016 46.3 46.3 -523.9 75.1

2017 47.9 47.9 -589.0 80.3

2018 49.8 49.8 -658.0 86.2

2019 51.5 51.5 -730.8 91.9

2020 53.0 53.0 -807.3 97.8

2021 54.2 54.2 -887.4 103.6

2022 55.6 55.6 -971.2 109.7

2023 59.2 59.2 -1,061.3 118.4

2024 63.1 63.1 -1,158.2 127.8

2025 67.4 67.4 -1,262.3 137.9

2026 71.9 71.9 -1,374.3 148.7

2027 76.7 76.7 -1,494.5 160.3

2028 81.8 81.8 -1,623.6 172.6

2029 87.5 87.5 -1,762.4 186.1

2030 93.5 93.5 -1,911.6 200.5

2031 100.0 100.0 -2,072.0 216.0

2032 107.0 107.0 -2,244.4 232.8

2033 114.1 114.1 -2,429.3 250.3

2034 121.7 121.7 -2,627.6 269.0

2035 129.8 129.8 -2,840.1 289.1

2036 138.3 138.3 -3,067.8 310.4

2037 147.4 147.4 -3,311.6 333.2

2038 155.7 155.7 -3,571.3 356.2

2039 164.5 164.5 -3,847.9 380.5

2040 173.6 173.6 -4,142.1 406.4

2041 183.3 183.3 -4,455.2 433.7

2042 193.5 193.5 -4,788.2 462.7

2043 203.1 203.1 -5,141.0 492.3

2044 213.1 213.1 -5,514.8 523.5

2045 223.7 223.7 -5,910.7 556.5

2046 234.8 234.8 -6,329.8 591.3

2047 246.4 246.4 -6,773.5 628.0

2048 257.8 257.8 -7,242.2 666.0

2049 269.6 269.6 -7,737.2 705.9

2050 282.1 282.1 -8,259.8 748.0

2051 295.0 295.0 -8,811.5 792.2

2052 308.6 308.6 -9,393.7 838.8

2053 322.3 322.3 -10,007.4 887.4

2054 336.4 336.4 -10,654.2 938.2

2055 351.1 351.1 -11,335.5 991.6

2056 365.7 365.7 -12,052.2 1,046.9

2057 380.6 380.6 -12,805.8 1,104.6

2058 396.0 396.0 -13,597.8 1,165.0

2059 411.7 411.7 -14,429.8 1,228.1

2060 427.9 427.9 -15,303.4 1,293.9

2061 444.4 444.4 -16,220.3 1,362.6

2062 461.5 461.5 -17,182.3 1,434.4

2063 479.3 479.3 -18,191.5 1,509.6

2064 497.6 497.6 -19,249.7 1,588.1

2065 516.3 516.3 -20,359.0 1,669.9

2066 535.5 535.5 -21,521.3 1,755.3

2067 555.3 555.3 -22,738.9 1,844.4

2068 575.8 575.8 -24,014.2 1,937.6

2069 597.0 597.0 -25,349.5 2,034.7

2070 618.5 618.5 -26,747.1 2,135.9

2071 640.7 640.7 -28,209.4 2,241.4

2072 663.3 663.3 -29,738.9 2,351.1

2073 686.9 686.9 -31,338.5 2,465.8

2074 711.0 711.0 -33,011.0 2,585.3

2075 735.7 735.7 -34,759.1 2,709.6

2076 760.9 760.9 -36,585.6 2,838.9

2077 786.7 786.7 -38,493.5 2,973.5

2078 813.5 813.5 -40,486.2 3,113.9

Based on Intermediate Assumptions of the 2003 Trustees Report

 With Ult TF Real Int Rate of 3.0

Office of the Actuary

Social Security Administration

 October 6, 2003
Table 1 c OASDI Cash Flow to General Fund of the Treasury---Diamond-Orszag Proposal vs. Theoretical OASDI

Diamond-Orszag 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 Year 1/ Treasury During the Year 1/

Annual Billions of Dollars --- Annual Billions of Dollars ---

Balance Current $ PV Jan 1, 03 Const 2003$ Balance Current $ PV Jan 1, 03 Const 2003$

2003 1.81 77 75 77 1.8 77 75 77

2004 1.88 83 76 81 1.9 83 76 81

2005 2.43 121 105 115 2.0 95 82 90

2006 2.51 133 108 123 2.1 103 84 95

2007 2.53 142 109 127 2.1 110 84 99

2008 2.51 148 107 129 2.0 112 81 98

2009 2.45 152 104 129 1.9 112 76 95

2010 2.36 154 99 127 1.8 110 70 90

2011 2.28 158 95 126 1.6 106 64 85

2012 2.04 148 84 115 1.4 99 56 76

2013 1.85 141 76 106 1.2 87 47 65

2014 1.63 130 66 95 1.0 72 37 52

2015 1.40 117 56 83 0.7 54 26 38

2016 1.13 99 45 68 0.4 31 14 21

2017 0.85 77 33 51 0.1 5 3 3

2018 0.56 52 21 34 -0.3 -25 -9 -16

2019 0.26 24 10 15 -0.6 -57 -21 -36

2020 -0.05 -7 -2 -5 -0.9 -94 -33 -58

2021 -0.37 -44 -14 -26 -1.3 -135 -44 -80

2022 -0.68 -82 -25 -47 -1.6 -178 -55 -103

2023 -0.91 -114 -33 -64 -1.9 -220 -64 -123

2024 -1.14 -149 -41 -81 -2.2 -265 -73 -144

2025 -1.36 -184 -48 -97 -2.5 -312 -81 -164

2026 -1.55 -220 -54 -113 -2.8 -361 -88 -184

2027 -1.73 -257 -59 -127 -3.1 -411 -95 -204

2028 -1.90 -294 -64 -142 -3.3 -463 -101 -223

2029 -2.03 -329 -67 -154 -3.5 -516 -106 -241

2030 -2.14 -362 -70 -165 -3.7 -568 -110 -258

2031 -2.22 -393 -72 -174 -3.9 -620 -113 -274

2032 -2.28 -421 -72 -181 -4.0 -671 -116 -288

2033 -2.32 -448 -72 -186 -4.1 -722 -117 -300

2034 -2.33 -471 -72 -190 -4.2 -773 -118 -312

2035 -2.32 -491 -71 -193 -4.3 -823 -119 -323

2036 -2.30 -509 -69 -194 -4.4 -872 -119 -332

2037 -2.25 -522 -67 -193 -4.4 -921 -118 -340

2038 -2.21 -535 -64 -192 -4.5 -969 -117 -348

2039 -2.15 -546 -62 -190 -4.5 -1,018 -116 -355

2040 -2.09 -555 -59 -188 -4.5 -1,069 -115 -361

2041 -2.03 -562 -57 -185 -4.5 -1,121 -113 -368

2042 -1.96 -569 -54 -181 -4.5 -1,176 -112 -375

2043 -1.91 -578 -52 -179 -4.6 -1,234 -111 -382

2044 -1.86 -588 -50 -177 -4.6 -1,297 -110 -390

2045 -1.81 -598 -47 -174 -4.6 -1,365 -109 -398

2046 -1.76 -609 -46 -172 -4.7 -1,438 -108 -407

2047 -1.72 -620 -44 -170 -4.7 -1,515 -108 -417

2048 -1.68 -633 -42 -169 -4.8 -1,598 -107 -427

2049 -1.64 -647 -40 -168 -4.8 -1,687 -106 -437

2050 -1.61 -661 -39 -166 -4.9 -1,782 -106 -448

2051 -1.58 -677 -38 -165 -5.0 -1,884 -106 -460

2052 -1.55 -694 -36 -165 -5.0 -1,995 -105 -473

2053 -1.52 -712 -35 -164 -5.1 -2,111 -105 -486

2054 -1.49 -730 -34 -163 -5.2 -2,234 -105 -500

2055 -1.46 -746 -33 -162 -5.2 -2,363 -105 -513

2056 -1.43 -763 -31 -161 -5.3 -2,498 -104 -526

2057 -1.40 -778 -30 -159 -5.4 -2,638 -104 -540

2058 -1.36 -790 -29 -157 -5.4 -2,783 -103 -553

2059 -1.31 -798 -28 -154 -5.5 -2,932 -103 -566

2060 -1.26 -803 -26 -150 -5.5 -3,088 -102 -578

2061 -1.21 -805 -25 -146 -5.6 -3,249 -101 -591

2062 -1.16 -806 -23 -142 -5.6 -3,420 -100 -604

2063 -1.11 -805 -22 -138 -5.7 -3,602 -99 -617

2064 -1.06 -802 -21 -133 -5.7 -3,793 -99 -631

2065 -1.01 -798 -19 -129 -5.8 -3,994 -98 -645

2066 -0.96 -793 -18 -124 -5.8 -4,207 -97 -660

2067 -0.91 -787 -17 -120 -5.9 -4,433 -97 -675

2068 -0.86 -777 -16 -115 -6.0 -4,672 -96 -691

2069 -0.81 -764 -14 -110 -6.0 -4,923 -95 -707

2070 -0.76 -749 -13 -104 -6.1 -5,188 -95 -723

2071 -0.71 -731 -12 -99 -6.1 -5,466 -94 -740

2072 -0.66 -709 -11 -93 -6.2 -5,759 -93 -756

2073 -0.60 -680 -10 -87 -6.3 -6,066 -93 -774

2074 -0.55 -646 -9 -80 -6.3 -6,389 -92 -791

2075 -0.49 -607 -8 -73 -6.4 -6,727 -91 -809

2076 -0.43 -562 -7 -66 -6.4 -7,082 -91 -826

2077 -0.37 -509 -6 -58 -6.5 -7,453 -90 -844

Total 2003-77 -929 -4,927

1/ Equals net investment in special Treasury Bonds by the 

 Trust Funds minus transfers from the General Fund of the Treasury. Office of the Actuary

 Results for PAYGO GR borrowing would be equivalent. Social Security Administration

Based on Intermediate Assumptions of the 2003 Trustees Report October 6, 2003