Monday, January 14, 2013

Social Security (OASDI) Holds Enough Assets To Pay Benefits For 4 Years Without A Debt Ceiling Increase

Posted by Milton Recht:

At the end of December 2012, the Social Security Trust Fund held $2.7 trillion in investments. The fund also receives $100 billion per year in interest payments on these investments.

According to the 2012 Social Security Trust Fund report, Table III.A5, Social Security paid out $725 billion in Old Age, Survivor and Disability Insurance (OASDI) benefits in 2011.

By selling the US bonds it holds as investments, Social Security can continue to pay OASDI benefits for 4 years without a debt ceiling increase.

With payroll taxes, interest on investments and tax receipts from taxable portion of Social Security benefits, the Trust Fund will see a net addition to the fund for the next few years, according to the OASDI Trustees actuarial report, Table IV.A3. In which case, the fund can continue to pay OASDI benefits for many years without a debt ceiling increase.

Sorry Democrats and Mr. President, Social Security beneficiaries do not need an immediate debt ceiling increase to continue to receive their benefits.

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