WASHINGTON - June 14 - Todays new projections by the Congressional Budget Office (CBO) show an improved forecast for Social Security. The news is good. The CBO projects that Social Security will have enough resources to cover full benefits until 2053, pushing the date of trust fund exhaustion out eleven years longer than projected by the Social Security Trustees in their 2004 annual report.
The CBO also reports that the total size of Social Securitys projected shortfall over the next 75 years is nearly 50 percent less than reported by the Social Security Trustees. According to the CBO, the projected shortfall is equivalent to just one percent of workers wages covered by Social Security, compared to the 1.89 percent shortfall projection from the Trustees.
The more optimistic conclusions of the CBO report show how sensitive long-term projections are to small differences in assumptions. It is more evidence that the sky-is-falling tactics that have been employed for years by those who want to privatize the system for ideological reasons should be rejected.
The projections in todays report derive from the CBOs new micro-simulation model that has been years in development. It provides a useful complement to the traditional actuarial model at Social Security. Hopefully, it will speed the process of working out balancednot radicalpolicies to strengthen, modernize and secure Social Security for future generations of retirees, disabled workers and their families.