Next Crisis, please ...

The Congressional Budget Office released some new testimony on the Outlook for Social Security today.

Some of it came in the form of three Budgetary Perspectives, by Douglas Holtz-Eakin, Director.

In 2008, the leading edge of the baby-boom generation will become eligible for early retirement benefits. Shortly thereafter, the annual Social Security surplus --the amount by which the program's dedicated revenues exceed benefits paid-- will begin to diminish (see Figure 1). That trend will continue until about 2020, when Social Security's finances will reach a balance, with the revenues coming into the system from payroll taxes and taxes on benefits matching the benefit payments going out. Thereafter, outlays for benefits are projected to exceed the system's revenues.

The key message from those numbers is that some form of the program is, in fact, sustainable for the indefinite future. With benefits reduced annually to match  available revenue (as they will be under current law when the trust funds run out), the program can be continued or sustained forever.

Thank you, Director Holtz-Eakin.