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The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds and the long-range outlook remains unchanged. The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2037, the same as projected last year. The Trustees also project that program costs will exceed tax revenues in 2010 and 2011, be less than tax revenues in 2012 through 2014, and then permanently exceed tax revenues beginning 2015, one year earlier than estimated in last year’s report. The worsening of the short-range outlook for the Social Security Trust Funds is due in large part to the recent economic downturn.

In the 2010 Annual Report to Congress, the Trustees announced:

• The projected point at which the combined Trust Funds will be exhausted comes in 2037 – the same as the estimate in last year’s report. At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits.
• The projected point at which tax revenues will fall below program costs comes in 2010. Tax revenues will again exceed program costs in 2012 through 2014 before permanently falling below program costs in 2015 -- one year sooner than the estimate in last year’s report.
• The projected actuarial deficit over the 75-year long-range period is 1.92 percent of taxable payroll -- 0.08 percentage point smaller than in last year’s report.
• Over the 75-year period, the Trust Funds would require additional revenue equivalent to $5.4 trillion in present value dollars to pay all scheduled benefits.

“The impact of the current economic downturn continues to be felt by the Social Security Trust Funds,” said Michael J. Astrue, Commissioner of Social Security. “The fact that the costs for the program will likely exceed tax revenue this year is not a cause for panic but it does send a strong message that it’s time for us to make the tough choices that we know we need to make. I applaud President Obama for his creation of the Deficit Commission so we can start the national discussion needed to ensure that Social Security remains a foundation of economic security for our children and grandchildren.”

Other highlights of the Trustees Report include:

• Income including interest to the combined OASDI Trust Funds amounted to $807 billion ($667 billion in net contributions, $22 billion from taxation of benefits and $118 billion in interest) in 2009.
• Total expenditures from the combined OASDI Trust Funds amounted to $686 billion in 2009.
• The assets of the combined OASDI Trust Funds increased by about $122 billion in 2009 to a total of $2.5 trillion.
• During 2009, an estimated 156 million people had earnings covered by Social Security and paid payroll taxes.
• Social Security paid benefits of $675 billion in calendar year 2009. There were about 53 million beneficiaries at the end of the calendar year.
• The cost of $6.2 billion to administer the program in 2009 was a very low 0.9 percent of total expenditures.
• The combined Trust Fund assets earned interest at an effective annual rate of 4.9 percent in 2009.

The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: Timothy F. Geithner, Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Kathleen Sebelius, Secretary of Health and Human Services; and Hilda L. Solis, Secretary of Labor. The two public trustee positions are currently vacant. President Obama nominated two individuals to serve as public trustees, and the Senate Finance Committee held hearings on July 29 for both trustee nominees. Their confirmations are pending.

The 2010 Trustees Report will be posted at www.socialsecurity.gov/OACT/TR/2010/ by Thursday afternoon.

Michael J. Astrue, Commissioner of Social Security, today opened in St. Louis, Missouri the agency’s fifth National Hearing Center (NHC). The St. Louis NHC is the largest in the nation and is co-located with two other new Social Security facilities -- the National Case Assistance Center (NCAC) and the Midwest Training Center. Together these three facilities will bring over 200 new federal jobs to St. Louis. The project, funded by the American Recovery and Reinvestment Act of 2009, was completed in just ten months and is the fastest the General Services Administration has ever delivered a project of this size, quality, and type.

“The St. Louis NHC will help us reduce the backlog of disability cases in those areas of the country where citizens with disabilities are currently waiting far too long for a hearing decision,” Commissioner Astrue said. “For the City of St. Louis and the State of Missouri, these facilities will bring new permanent federal jobs.”

The St. Louis NHC will be staffed by 100 people -- 18 Administrative Law Judges (ALJs) and 82 support staff. The NHC uses state-of-the-art electronic video technology to hold disability hearings remotely throughout the country to reduce backlogs. St. Louis initially will hear disability cases for Cleveland, Ohio and Minneapolis, Minnesota – cities with two of the most backlogged hearing offices in the nation. Social Security has additional NHCs in Albuquerque, New Mexico, Baltimore, Maryland, Falls Church, Virginia, and Chicago, Illinois.

The NCAC and Midwest Training Center will employ 102 people. The NCAC will provide decision-writing assistance to backlogged hearing offices throughout the U.S. The Midwest Training Center will enable the agency to train Midwest and western employees closer to home – saving taxpayers money by reducing the travel costs associated with employee training.

“The new Social Security facilities in St. Louis are prime examples of Recovery Act dollars at work,” said Commissioner Astrue. “I applaud the General Services Administration and the Social Security staff who worked tirelessly to open these new facilities in record time. The result will be better service for disabled Americans and increased job opportunities for residents of the St. Louis area.”

Social Security’s administrative appeals operation, under the Office of Disability Adjudication and Review, is the largest administrative judicial system in the world. ALJs conduct hearings and will issue approximately three-quarters of a million decisions this year. For additional information about Social Security’s hearings and appeals process, go to www.socialsecurity.gov/appeals.

Michael J. Astrue, Commissioner of Social Security, today announced that the agency is submitting legislation to Congress that would prohibit states, without the Commissioner’s prior authorization, from reducing the number of state personnel who make disability determinations for Social Security or the hours they work below the amount the agency authorizes.

“It is long past time that states end these unconscionable furloughs and hiring freezes that needlessly harm citizens with disabilities,” Commissioner Astrue said. “States realize no fiscal savings whatsoever from these actions and this legislation would prevent needless delays in the disability determination process. I am grateful for the President’s support and urge Congress to move quickly to help us make this provision the law of the land.”

More than a dozen states have implemented furloughs and hiring freezes that affect the federally paid state workers who make disability determinations for Social Security. The state agencies that employ these workers in their disability determination service (DDS) components receive 100 percent of their funding from the Federal government. Accordingly, states do not save any money by imposing furloughs and hiring freezes on federally funded employees. Rather, they slow benefits to some of the most vulnerable citizens – for example, furloughs in California in fiscal year 2010 delayed payment of over $11 million in benefits to more than 40,000 citizens with disabilities. State-imposed furloughs and hiring freezes also reduce state income tax revenue and increase unemployment in the state.

“The members of Local 1000 have always believed that furloughing federally funded positions doesn’t make economic sense and that has been proven in California during these past 18 months that Governor Schwarzenegger has imposed furloughs on state employees,” Yvonne Walker, President of Service Employees International Union Local 1000 said. “I applaud Social Security for initiating legislation that would prevent further bad economic policy from going forward. This provision will not only help DDS workers, but the claimants who rely on the services our members provide.”

“We commend the Commissioner for his forceful and dedicated leadership in taking this bold action,” said Susan X. Smith, President of the National Association of Disability Examiners (NADE). “Our members are witness to the impact the current economic recession has had for disabled citizens and we are working hard to meet the dramatic increase in claims for benefits. These furloughs further compound the problems faced by disabled citizens by creating unnecessary delays in the processing of their claims. NADE urges quick action with regards to this legislative proposal.”

Michael J. Astrue, Commissioner of Social Security, today announced that Social Security is asking members of the public, as well as current and former employees, to help the agency celebrate its 75 years of public service by sharing their personal stories and reflections about how Social Security has touched their lives. To share your story, go to www.socialsecurity.gov and click on the box that says “Social Security Celebrates 75 Years of Public Service.” Selected stories will be edited for content and brevity and posted for everyone to read.

“On August 14, the most important and successful domestic program in our nation’s history turns 75,” Commissioner Astrue said. “For three quarters of a century, Social Security has provided a financial lifeline to millions of Americans. As we approach our anniversary, Social Security remains a solid foundation for retirees, the disabled, and survivors. I encourage everyone to visit our website, share their stories, and join me in wishing Social Security a happy 75th anniversary.”

Social Security is asking people to tell how the program made a difference in their lives and the lives of their family and friends. For example:

• How did it feel to receive your first retirement check?

• Tell us if you received survivors benefits when a loved one died.
• How has the Social Security disability program helped you?
• How did a Social Security Administration employee go above and beyond to provide you with great service?
• Current and former Social Security Administration employees: Share your memorable stories of service.

Social Security also will soon launch a video contest “How Social Security Has Made a Difference in My Life.” Submitted videos will be posted on the agency’s YouTube channel and the winning video will be posted on www.socialsecurity.gov. Details of the contest will be posted on the website later this week.

Social Security invites the public to view a special photo gallery that takes them on a brief journey through the agency’s 75-year history. The photo gallery is available at www.socialsecurity.gov/75thanniversary. A more extensive collection of history-related materials that presents both the institutional history of the Social Security Administration and the history of the Social Security program is available at www.socialsecurity.gov/history.