Summary: Pursuant to a congressional request, GAO reviewed the past and current projections for the Old Age and Survivors Insurance (OASI) trust fund, specifically the important assumptions underlying the revenue and spending projections that determine the trust fund balance.
GAO found that: (1) through 1982, projections of the OASI trust fund balance have been inaccurate, because the inability to foresee economic trends led to overestimated trust fund reserves; (2) while the Social Security Amendments of 1983 solved short-run problems to stabilize the declining OASI trust fund balance, a low level of trust fund reserves is anticipated for the next several years; (3) the accuracy of long-term projections depends on economic assumptions and projected increases in the ratio of beneficiaries; (4) a trust fund reserve buildup could reduce the tax burden that future generations would otherwise bear in order to finance future benefits; and (5) a projected buildup of trust fund reserves will depend on future economic conditions and congressional action since Congress can use the surplus to reduce payroll taxes, increase benefits, or invest in budget deficits.
