CBO estimates that in fiscal year 2012, spending for Social Security totaled $773 billion, equal to about 5 percent of gross domestic product and one-fifth of federal spending. As more members of the baby-boom generation retire and the U.S. population grows older in the coming decades, Social Security outlays are projected to grow more rapidly than the economy and more rapidly than the program’s dedicated tax revenues.
Over the next 10 years, outlays will exceed dedicated tax revenues by about 10 percent, on average. That gap will grow larger in the 2020s, and by 2030, Social Security outlays will be about 6 percent of gross domestic product and will exceed dedicated tax revenues by about 20 percent. As a result, under current law, resources available to the Social Security program will become insufficient to pay full benefits in about 20 years, CBO projects.
Today CBO released The 2012 Long-Term Projections for Social Security: Additional Information, which expands upon CBO’s projections of the Social Security program’s finances that were included in CBO’s The 2012 Long-Term Budget Outlook, published in June.
The analysis was prepared by Noah Meyerson, Xiaotong Niu, Charles Pineles-Mark, Jonathan Schwabish, Michael Simpson, and Julie Topoleski of CBO’s Long-Term Analysis Unit under the leadership of Joyce Manchester.