By Nathalie Voit
In its annual report on the long-term status of Social Security, the Treasury Department issued an upgraded outlook for the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds, the program’s two separate funds.
According to the updated report, the OASI Trust Fund is expected to remain fully financed until 2034, one year later than forecast in last year’s report. Most Americans rely on OASI for their retirement benefits.
The DI Trust Fund, which doles out disability benefits, is no longer projected to be depleted by 2057. The government expects scheduled payments to continue in full over the next 75 years.
Medicare Part A, which helps cover services such as inpatient hospital care, will remain in good standing through 2028, two years later than estimated by Social Security officials last year, the department said in its Medicare Trustees report.
According to Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh, which signed a summary of both reports, this year’s improved outlook is due to a faster-than-predicted recovery from the coronavirus.
“The main reasons for the smaller deficit are a stronger than expected recovery from the pandemic-induced recession, higher expected levels of labor productivity, and lower future disability incidence rates that reflect recent experience,” Yellen and Walsh wrote.
“Changes were made to near-term economic data and assumptions reflecting that the recovery of employment, earnings, and GDP from the 2020 recession has been faster and stronger than projected in last year’s report, resulting in higher payroll tax receipts and higher revenue from income taxation of Social Security benefits. Real interest rates are projected to be slightly higher in the near term, lowering the present value of projected future deficits,” the department noted in the release.