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Social Security's Financial Outlook: The 2011 Update in Perspective


  • Alicia H. Munnell


The 2011 Trustees Report for the Social Security system – unlike that for the Medicare program – contains no surprises, which may explain the relative lack of attention it has received in the press. Despite reduced revenues and increased benefit claims in the short run, the system continues to face a 75-year deficit equal to about 2 percent of taxable payroll. This brief puts the current report in perspective and discusses some recent developments – the restora­tion of the cost-of-living adjustment, the impending exhaustion of the Disability Insurance Trust Fund, and the impact of the 2-percentage-point reduction in the employee’s portion of the payroll tax. The good news is that, after a three-year gap, this year’s report was signed by two public trustees – one recommended by the Republicans, one by the Democrats. These independent representatives were of one voice in urging policymakers to address Social Security’s financing gap sooner rather than later.

Suggested Citation

  • Alicia H. Munnell, 2011. "Social Security's Financial Outlook: The 2011 Update in Perspective," Issues in Brief ib2011-9, Center for Retirement Research, revised Jun 2011.
  • Handle: RePEc:crr:issbrf:ib2011-9

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    1. Joaquin Vial & Angel Melguizo, 2008. "Moving from Pay as You Go to Privately Managed Individual Pension Accounts: What have we learned after 25 years of the Chilean Pension Reform?," Working Papers 0805, BBVA Bank, Economic Research Department.
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    3. Calvo, Esteban & Williamson, John B., 2006. "Old-Age Pension Reform and Modernization Pathways: Lessons for China from Latin America," MPRA Paper 4872, University Library of Munich, Germany, revised 2007.
    4. repec:idb:brikps:59998 is not listed on IDEAS
    5. Augusto Iglesias-Palau, 2009. "Pension Reform in Chile Revisited: What Has Been Learned?," OECD Social, Employment and Migration Working Papers 86, OECD Publishing.
    6. Barr, Nicholas & Diamond, Peter, 2008. "Reforming Pensions: Principles and Policy Choices," OUP Catalogue, Oxford University Press, number 9780195311303.
    7. Mesa-Lago, Carmelo, 2004. "Las reformas de pensiones en América Latina y su impacto en los principios de la seguridad social," Financiamiento para el Desarrollo 144, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. World Bank, 2007. "Argentina : Facing the Challenge of Ageing and Social Security," World Bank Other Operational Studies 7989, The World Bank.
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