May 13, 2005

CBPP: Bush’s plan fails on solvency

A preliminary Center on Budget and Policy Priorities analysis of President Bush’s proposals for Social Security shows that the combination of private accounts and progressive indexing would close only 30 percent of the 75-year actuarial deficit, move the date of trust fund exhaustion forward by 11 years, and add trillions to the national debt. Here’s the key table:

Table 1: Impact on President’s Plan on Social Security Financing and Solvency
	Current policy	President’s sliding-scale benefit reduction, by itself	Sliding-scale benefit reductions plus the President’s accounts
Year when Social Security benefits first exceed receipts	2017	2017	2011
Year of Trust Fund exhaustion	2041	2047	2030
Size of 75-year shortfall, as a percentage of taxable payroll	-1.92%	-0.78%	-1.34%
Percentage of 75-year shortfall that would be closed	0%	59%	30%

This about phaseout, not solvency. That much is clear.