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Is Social Security's Financial Future in Jeopardy? 

The Honorable David M. Walker: 
Comptroller General of the United States: 

Centrists.org and Alliance for Worker Retirement Security: 
Washington, DC: 
January 21, 2005: 

Social Security and Medicare’s Hospital Insurance Trust Funds Face Cash 
Deficits: 

[See PDF for image] –graphic text: 

Stacked bar chart with 2 items.

Billions of 2004 dollars: 

Year: 2000; 
Medicare HI cash flow: $26.31; 
Social Security cash flow: $95.75. 

Year: 2001; 
Medicare HI cash flow: $18.06; 
Social Security cash flow: $94.70. 

Year: 2002; 
Medicare HI cash flow: $11.91; 
Social Security cash flow: $88.01. 

Year: 2003; 
Medicare HI cash flow: $6.14; 
Social Security cash flow: $68.72. 

Year: 2004; 
Medicare HI cash flow: -$7.25; 
Social Security cash flow: $64.40. 

Medicare HI cash deficit: 2004. 

Year: 2005; 
Medicare HI cash flow: -$7.20; 
Social Security cash flow: $86.40. 

Year: 2006; 
Medicare HI cash flow: -$9.25; 
Social Security cash flow: $93.10. 

Year: 2007; 
Medicare HI cash flow: -$10.23; 
Social Security cash flow: $98.00. 

Year: 2008; 
Medicare HI cash flow: -$11.18; 
Social Security cash flow: $99.10. 

Year: 2009; 
Medicare HI cash flow: -$12.78; 
Social Security cash flow: $92.50. 

Year: 2010; 
Medicare HI cash flow: -$14.81; 
Social Security cash flow: $88.50. 

Year: 2011; 
Medicare HI cash flow: -$16.35; 
Social Security cash flow: $84.30. 

Year: 2012; 
Medicare HI cash flow: -$18.59; 
Social Security cash flow: $74.20. 

Year: 2013; 
Medicare HI cash flow: -$22.53; 
Social Security cash flow: $61.90. 

Year: 2014; 
Medicare HI cash flow: -$25.79; 
Social Security cash flow: $49.40. 

Year: 2015; 
Medicare HI cash flow: -$31.01; 
Social Security cash flow: $35.00. 

Year: 2016; 
Medicare HI cash flow: -$36.70; 
Social Security cash flow: $19.00. 

Year: 2017; 
Medicare HI cash flow: -$43.13; 
Social Security cash flow: $1.70. 

Year: 2018; 
Medicare HI cash flow: -$50.37; 
Social Security cash flow: -$16.20. 

Social Security cash deficit: 2018. 

Year: 2019; 
Medicare HI cash flow: -$58.59; 
Social Security cash flow: -$35.90. 

Year: 2020; 
Medicare HI cash flow: -$67.30; 
Social Security cash flow: -$56.30. 

Year: 2021; 
Medicare HI cash flow: -$77.09; 
Social Security cash flow: -$77.10. 

Year: 2022; 
Medicare HI cash flow: -$87.64; 
Social Security cash flow: -$97.80. 

Year: 2023; 
Medicare HI cash flow: -$99.15; 
Social Security cash flow: -$119.10. 

Year: 2024; 
Medicare HI cash flow: -$111.45; 
Social Security cash flow: -$140.10. 

Year: 2025; 
Medicare HI cash flow: -$124.49; 
Social Security cash flow: -$161.30. 

Year: 2026; 
Medicare HI cash flow: -$137.93; 
Social Security cash flow: -$182.00. 

Year: 2027; 
Medicare HI cash flow: -$151.64; 
Social Security cash flow: -$202.00. 

Year: 2028; 
Medicare HI cash flow: -$165.94; 
Social Security cash flow: -$221.20. 

Year: 2029; 
Medicare HI cash flow: -$182.61; 
Social Security cash flow: -$238.90. 

Year: 2030; 
Medicare HI cash flow: -$199.45; 
Social Security cash flow: -$255.80. 

Year: 2031; 
Medicare HI cash flow: -$216.12; 
Social Security cash flow: -$272.20. 

Year: 2032; 
Medicare HI cash flow: -$233.12; 
Social Security cash flow: -$287.70. 

Year: 2033; 
Medicare HI cash flow: -$250.96; 
Social Security cash flow: -$301.60. 

Year: 2034; 
Medicare HI cash flow: -$269.80; 
Social Security cash flow: -$314.10. 

Year: 2035; 
Medicare HI cash flow: -$289.29; 
Social Security cash flow: -$325.20. 

Year: 2036; 
Medicare HI cash flow: -$308.47; 
Social Security cash flow: -$335.10. 

Year: 2037; 
Medicare HI cash flow: -$327.27; 
Social Security cash flow: -$343.80. 

Year: 2038; 
Medicare HI cash flow: -$346.18; 
Social Security cash flow: -$351.20. 

Year: 2039; 
Medicare HI cash flow: -$365.42; 
Social Security cash flow: -$357.80. 

Year: 2040; 
Medicare HI cash flow: -$384.94; 
Social Security cash flow: -$364.00.

Source: GAO analysis based on the intermediate assumptions of The 2004 
Annual Report of the Board of Trustees of the Federal Old-Age and 
Survivors Insurance and the Federal Disability Insurance Trust Funds 
and The 2004 Annual Report of the Boards of Trustees of the Federal 
Hospital Insurance and Federal Supplementary Medical Insurance Trust 
Funds. The above excludes Medicare Part B and the newly enacted 
Medicare Part D benefit.

[End of figure]

Social Security, Medicare, and Medicaid Spending as a Percent of GDP: 

[See PDF for image] – graphic text 

Area graph with 81 Groups and 3 items per Group. 

2000: Total value: 7.75% of GDP. 
Medicare value: 2.29% of GDP, which is 29.5% of 2000 spending. 
Medicaid value: 1.23% of GDP, which is 15.9% of 2000 spending. 
Social Security value: 4.23% of GDP, which is 54.6% of 2000 spending. 

2001: Total value: 8.14% of GDP. 
Medicare value: 2.46% of GDP, which is 30.2% of 2001 spending. 
Medicaid value: 1.33% of GDP, which is 16.3% of 2001 spending. 
Social Security value: 4.35% of GDP, which is 53.4% of 2001 spending. 

2002: Total value: 8.4% of GDP. 
Medicare value: 2.55% of GDP, which is 30.4% of 2002 spending. 
Medicaid value: 1.44% of GDP, which is 17.1% of 2002 spending. 
Social Security value: 4.41% of GDP, which is 52.5% of 2002 spending. 

2003: Total value: 8.44% of GDP. 
Medicare value: 2.59% of GDP, which is 30.7% of 2003 spending. 
Medicaid value: 1.49% of GDP, which is 17.7% of 2003 spending. 
Social Security value: 4.36% of GDP, which is 51.7% of 2003 spending. 

2004: Total value: 8.52% of GDP. 
Medicare value: 2.68% of GDP, which is 31.5% of 2004 spending. 
Medicaid value: 1.51% of GDP, which is 17.7% of 2004 spending. 
Social Security value: 4.33% of GDP, which is 50.8% of 2004 spending. 

2005: Total value: 8.52% of GDP. 
Medicare value: 2.76% of GDP, which is 32.4% of 2005 spending. 
Medicaid value: 1.48% of GDP, which is 17.4% of 2005 spending. 
Social Security value: 4.28% of GDP, which is 50.2% of 2005 spending. 

2006: Total value: 9.16% of GDP. 
Medicare value: 3.44% of GDP, which is 37.6% of 2006 spending. 
Medicaid value: 1.47% of GDP, which is 16.0% of 2006 spending. 
Social Security value: 4.25% of GDP, which is 46.4% of 2006 spending. 

2007: Total value: 9.23% of GDP. 
Medicare value: 3.51% of GDP, which is 38.0% of 2007 spending. 
Medicaid value: 1.49% of GDP, which is 16.1% of 2007 spending. 
Social Security value: 4.23% of GDP, which is 45.8% of 2007 spending. 

2008: Total value: 9.34% of GDP. 
Medicare value: 3.56% of GDP, which is 38.1% of 2008 spending. 
Medicaid value: 1.54% of GDP, which is 16.5% of 2008 spending. 
Social Security value: 4.24% of GDP, which is 45.4% of 2008 spending. 

2009: Total value: 9.49% of GDP. 
Medicare value: 3.61% of GDP, which is 38.0% of 2009 spending. 
Medicaid value: 1.6% of GDP, which is 16.9% of 2009 spending. 
Social Security value: 4.28% of GDP, which is 45.1% of 2009 spending. 

2010: Total value: 9.64% of GDP. 
Medicare value: 3.66% of GDP, which is 38.0% of 2010 spending. 
Medicaid value: 1.66% of GDP, which is 17.2% of 2010 spending. 
Social Security value: 4.32% of GDP, which is 44.8% of 2010 spending. 

2011: Total value: 9.82% of GDP. 
Medicare value: 3.72% of GDP, which is 37.9% of 2011 spending. 
Medicaid value: 1.73% of GDP, which is 17.6% of 2011 spending. 
Social Security value: 4.37% of GDP, which is 44.5% of 2011 spending. 

2012: Total value: 10.06% of GDP. 
Medicare value: 3.81% of GDP, which is 37.9% of 2012 spending. 
Medicaid value: 1.8% of GDP, which is 17.9% of 2012 spending. 
Social Security value: 4.45% of GDP, which is 44.2% of 2012 spending. 

2013: Total value: 10.34% of GDP. 
Medicare value: 3.93% of GDP, which is 38.0% of 2013 spending. 
Medicaid value: 1.87% of GDP, which is 18.1% of 2013 spending. 
Social Security value: 4.54% of GDP, which is 43.9% of 2013 spending. 

2014: Total value: 10.6% of GDP. 
Medicare value: 4.07% of GDP, which is 38.4% of 2014 spending. 
Medicaid value: 1.9% of GDP, which is 17.9% of 2014 spending. 
Social Security value: 4.63% of GDP, which is 43.7% of 2014 spending. 

2015: Total value: 10.88% of GDP. 
Medicare value: 4.24% of GDP, which is 39.0% of 2015 spending. 
Medicaid value: 1.9% of GDP, which is 17.5% of 2015 spending. 
Social Security value: 4.74% of GDP, which is 43.6% of 2015 spending. 

2016: Total value: 11.15% of GDP. 
Medicare value: 4.4% of GDP, which is 39.5% of 2016 spending. 
Medicaid value: 1.9% of GDP, which is 17.0% of 2016 spending. 
Social Security value: 4.85% of GDP, which is 43.5% of 2016 spending. 

2017: Total value: 11.41% of GDP. 
Medicare value: 4.55% of GDP, which is 39.9% of 2017 spending. 
Medicaid value: 1.9% of GDP, which is 16.7% of 2017 spending. 
Social Security value: 4.96% of GDP, which is 43.5% of 2017 spending. 

2018: Total value: 11.69% of GDP. 
Medicare value: 4.72% of GDP, which is 40.4% of 2018 spending. 
Medicaid value: 1.9% of GDP, which is 16.3% of 2018 spending. 
Social Security value: 5.07% of GDP, which is 43.4% of 2018 spending. 

2019: Total value: 12% of GDP. 
Medicare value: 4.89% of GDP, which is 40.8% of 2019 spending. 
Medicaid value: 1.92% of GDP, which is 16.0% of 2019 spending. 
Social Security value: 5.19% of GDP, which is 43.3% of 2019 spending. 

2020: Total value: 12.35% of GDP. 
Medicare value: 5.08% of GDP, which is 41.1% of 2020 spending. 
Medicaid value: 1.95% of GDP, which is 15.8% of 2020 spending. 
Social Security value: 5.32% of GDP, which is 43.1% of 2020 spending. 

2021: Total value: 12.69% of GDP. 
Medicare value: 5.26% of GDP, which is 41.4% of 2021 spending. 
Medicaid value: 1.99% of GDP, which is 15.7% of 2021 spending. 
Social Security value: 5.44% of GDP, which is 42.9% of 2021 spending. 

2022: Total value: 13.02% of GDP. 
Medicare value: 5.45% of GDP, which is 41.9% of 2022 spending. 
Medicaid value: 2.02% of GDP, which is 15.5% of 2022 spending. 
Social Security value: 5.55% of GDP, which is 42.6% of 2022 spending. 

2023: Total value: 13.37% of GDP. 
Medicare value: 5.64% of GDP, which is 42.2% of 2023 spending. 
Medicaid value: 2.06% of GDP, which is 15.4% of 2023 spending. 
Social Security value: 5.67% of GDP, which is 42.4% of 2023 spending. 

2024: Total value: 13.71% of GDP. 
Medicare value: 5.84% of GDP, which is 42.6% of 2024 spending. 
Medicaid value: 2.09% of GDP, which is 15.2% of 2024 spending. 
Social Security value: 5.78% of GDP, which is 42.2% of 2024 spending. 

2025: Total value: 14.06% of GDP. 
Medicare value: 6.04% of GDP, which is 43.0% of 2025 spending. 
Medicaid value: 2.13% of GDP, which is 15.1% of 2025 spending. 
Social Security value: 5.89% of GDP, which is 41.9% of 2025 spending. 

2026: Total value: 14.38% of GDP. 
Medicare value: 6.22% of GDP, which is 43.3% of 2026 spending. 
Medicaid value: 2.17% of GDP, which is 15.1% of 2026 spending. 
Social Security value: 5.99% of GDP, which is 41.7% of 2026 spending. 

2027: Total value: 14.68% of GDP. 
Medicare value: 6.4% of GDP, which is 43.6% of 2027 spending. 
Medicaid value: 2.2% of GDP, which is 15.0% of 2027 spending. 
Social Security value: 6.08% of GDP, which is 41.4% of 2027 spending. 

2028: Total value: 14.98% of GDP. 
Medicare value: 6.58% of GDP, which is 43.9% of 2028 spending. 
Medicaid value: 2.23% of GDP, which is 14.9% of 2028 spending. 
Social Security value: 6.17% of GDP, which is 41.2% of 2028 spending. 

2029: Total value: 15.28% of GDP. 
Medicare value: 6.77% of GDP, which is 44.3% of 2029 spending. 
Medicaid value: 2.27% of GDP, which is 14.9% of 2029 spending. 
Social Security value: 6.24% of GDP, which is 40.8% of 2029 spending. 

2030: Total value: 15.57% of GDP. 
Medicare value: 6.95% of GDP, which is 44.6% of 2030 spending. 
Medicaid value: 2.31% of GDP, which is 14.8% of 2030 spending. 
Social Security value: 6.31% of GDP, which is 40.5% of 2030 spending. 

2031: Total value: 15.83% of GDP. 
Medicare value: 7.11% of GDP, which is 44.9% of 2031 spending. 
Medicaid value: 2.35% of GDP, which is 14.8% of 2031 spending. 
Social Security value: 6.37% of GDP, which is 40.2% of 2031 spending. 

2032: Total value: 16.08% of GDP. 
Medicare value: 7.26% of GDP, which is 45.1% of 2032 spending. 
Medicaid value: 2.4% of GDP, which is 14.9% of 2032 spending. 
Social Security value: 6.42% of GDP, which is 39.9% of 2032 spending. 

2033: Total value: 16.33% of GDP. 
Medicare value: 7.42% of GDP, which is 45.4% of 2033 spending. 
Medicaid value: 2.45% of GDP, which is 15.0% of 2033 spending. 
Social Security value: 6.46% of GDP, which is 39.6% of 2033 spending. 

2034: Total value: 16.58% of GDP. 
Medicare value: 7.58% of GDP, which is 45.7% of 2034 spending. 
Medicaid value: 2.5% of GDP, which is 15.1% of 2034 spending. 
Social Security value: 6.5% of GDP, which is 39.2% of 2034 spending. 

2035: Total value: 16.82% of GDP. 
Medicare value: 7.75% of GDP, which is 46.1% of 2035 spending. 
Medicaid value: 2.55% of GDP, which is 15.2% of 2035 spending. 
Social Security value: 6.52% of GDP, which is 38.8% of 2035 spending. 

2036: Total value: 17.04% of GDP. 
Medicare value: 7.9% of GDP, which is 46.4% of 2036 spending. 
Medicaid value: 2.6% of GDP, which is 15.3% of 2036 spending. 
Social Security value: 6.54% of GDP, which is 38.4% of 2036 spending. 

2037: Total value: 17.24% of GDP. 
Medicare value: 8.04% of GDP, which is 46.6% of 2037 spending. 
Medicaid value: 2.65% of GDP, which is 15.4% of 2037 spending. 
Social Security value: 6.55% of GDP, which is 38.0% of 2037 spending. 

2038: Total value: 17.42% of GDP. 
Medicare value: 8.17% of GDP, which is 46.9% of 2038 spending. 
Medicaid value: 2.7% of GDP, which is 15.5% of 2038 spending. 
Social Security value: 6.55% of GDP, which is 37.6% of 2038 spending. 

2039: Total value: 17.59% of GDP. 
Medicare value: 8.29% of GDP, which is 47.1% of 2039 spending. 
Medicaid value: 2.75% of GDP, which is 15.6% of 2039 spending. 
Social Security value: 6.55% of GDP, which is 37.2% of 2039 spending. 

2040: Total value: 17.75% of GDP. 
Medicare value: 8.41% of GDP, which is 47.4% of 2040 spending. 
Medicaid value: 2.8% of GDP, which is 15.8% of 2040 spending. 
Social Security value: 6.54% of GDP, which is 36.8% of 2040 spending. 

2041: Total value: 17.91% of GDP. 
Medicare value: 8.53% of GDP, which is 47.6% of 2041 spending. 
Medicaid value: 2.85% of GDP, which is 15.9% of 2041 spending. 
Social Security value: 6.53% of GDP, which is 36.5% of 2041 spending. 

2042: Total value: 18.07% of GDP. 
Medicare value: 8.64% of GDP, which is 47.8% of 2042 spending. 
Medicaid value: 2.9% of GDP, which is 16.0% of 2042 spending. 
Social Security value: 6.53% of GDP, which is 36.1% of 2042 spending. 

2043: Total value: 18.23% of GDP. 
Medicare value: 8.76% of GDP, which is 48.1% of 2043 spending. 
Medicaid value: 2.95% of GDP, which is 16.2% of 2043 spending. 
Social Security value: 6.52% of GDP, which is 35.8% of 2043 spending. 

2044: Total value: 18.39% of GDP. 
Medicare value: 8.88% of GDP, which is 48.3% of 2044 spending. 
Medicaid value: 3% of GDP, which is 16.3% of 2044 spending. 
Social Security value: 6.51% of GDP, which is 35.4% of 2044 spending. 

2045: Total value: 18.55% of GDP. 
Medicare value: 9% of GDP, which is 48.5% of 2045 spending. 
Medicaid value: 3.05% of GDP, which is 16.4% of 2045 spending. 
Social Security value: 6.5% of GDP, which is 35.0% of 2045 spending. 

2046: Total value: 18.71% of GDP. 
Medicare value: 9.12% of GDP, which is 48.7% of 2046 spending. 
Medicaid value: 3.1% of GDP, which is 16.6% of 2046 spending. 
Social Security value: 6.49% of GDP, which is 34.7% of 2046 spending. 

2047: Total value: 18.86% of GDP. 
Medicare value: 9.23% of GDP, which is 48.9% of 2047 spending. 
Medicaid value: 3.14% of GDP, which is 16.6% of 2047 spending. 
Social Security value: 6.49% of GDP, which is 34.4% of 2047 spending. 

2048: Total value: 19% of GDP. 
Medicare value: 9.33% of GDP, which is 49.1% of 2048 spending. 
Medicaid value: 3.19% of GDP, which is 16.8% of 2048 spending. 
Social Security value: 6.48% of GDP, which is 34.1% of 2048 spending. 

2049: Total value: 19.15% of GDP. 
Medicare value: 9.44% of GDP, which is 49.3% of 2049 spending. 
Medicaid value: 3.23% of GDP, which is 16.9% of 2049 spending. 
Social Security value: 6.48% of GDP, which is 33.8% of 2049 spending. 

2050: Total value: 19.3% of GDP. 
Medicare value: 9.56% of GDP, which is 49.5% of 2050 spending. 
Medicaid value: 3.27% of GDP, which is 16.9% of 2050 spending. 
Social Security value: 6.47% of GDP, which is 33.5% of 2050 spending. 

2051: Total value: 19.45% of GDP. 
Medicare value: 9.67% of GDP, which is 49.7% of 2051 spending. 
Medicaid value: 3.31% of GDP, which is 17.0% of 2051 spending. 
Social Security value: 6.47% of GDP, which is 33.3% of 2051 spending. 

2052: Total value: 19.61% of GDP. 
Medicare value: 9.78% of GDP, which is 49.9% of 2052 spending. 
Medicaid value: 3.35% of GDP, which is 17.1% of 2052 spending. 
Social Security value: 6.48% of GDP, which is 33.0% of 2052 spending. 

2053: Total value: 19.77% of GDP. 
Medicare value: 9.9% of GDP, which is 50.1% of 2053 spending. 
Medicaid value: 3.39% of GDP, which is 17.1% of 2053 spending. 
Social Security value: 6.48% of GDP, which is 32.8% of 2053 spending. 

2054: Total value: 19.96% of GDP. 
Medicare value: 10.03% of GDP, which is 50.3% of 2054 spending. 
Medicaid value: 3.44% of GDP, which is 17.2% of 2054 spending. 
Social Security value: 6.49% of GDP, which is 32.5% of 2054 spending. 

2055: Total value: 20.13% of GDP. 
Medicare value: 10.16% of GDP, which is 50.5% of 2055 spending. 
Medicaid value: 3.48% of GDP, which is 17.3% of 2055 spending. 
Social Security value: 6.49% of GDP, which is 32.2% of 2055 spending. 

2056: Total value: 20.32% of GDP. 
Medicare value: 10.3% of GDP, which is 50.7% of 2056 spending. 
Medicaid value: 3.52% of GDP, which is 17.3% of 2056 spending. 
Social Security value: 6.5% of GDP, which is 32.0% of 2056 spending. 

2057: Total value: 20.52% of GDP. 
Medicare value: 10.44% of GDP, which is 50.9% of 2057 spending. 
Medicaid value: 3.57% of GDP, which is 17.4% of 2057 spending. 
Social Security value: 6.51% of GDP, which is 31.7% of 2057 spending. 

2058: Total value: 20.72% of GDP. 
Medicare value: 10.59% of GDP, which is 51.1% of 2058 spending. 
Medicaid value: 3.61% of GDP, which is 17.4% of 2058 spending. 
Social Security value: 6.52% of GDP, which is 31.5% of 2058 spending. 

2059: Total value: 20.92% of GDP. 
Medicare value: 10.74% of GDP, which is 51.3% of 2059 spending. 
Medicaid value: 3.66% of GDP, which is 17.5% of 2059 spending. 
Social Security value: 6.52% of GDP, which is 31.2% of 2059 spending. 

2060: Total value: 21.12% of GDP. 
Medicare value: 10.89% of GDP, which is 51.6% of 2060 spending. 
Medicaid value: 3.7% of GDP, which is 17.5% of 2060 spending. 
Social Security value: 6.53% of GDP, which is 30.9% of 2060 spending. 

2061: Total value: 21.33% of GDP. 
Medicare value: 11.04% of GDP, which is 51.8% of 2061 spending. 
Medicaid value: 3.75% of GDP, which is 17.6% of 2061 spending. 
Social Security value: 6.54% of GDP, which is 30.7% of 2061 spending. 

2062: Total value: 21.54% of GDP. 
Medicare value: 11.19% of GDP, which is 51.9% of 2062 spending. 
Medicaid value: 3.8% of GDP, which is 17.6% of 2062 spending. 
Social Security value: 6.55% of GDP, which is 30.4% of 2062 spending. 

2063: Total value: 21.74% of GDP. 
Medicare value: 11.34% of GDP, which is 52.2% of 2063 spending. 
Medicaid value: 3.84% of GDP, which is 17.7% of 2063 spending. 
Social Security value: 6.56% of GDP, which is 30.2% of 2063 spending. 

2064: Total value: 21.96% of GDP. 
Medicare value: 11.51% of GDP, which is 52.4% of 2064 spending. 
Medicaid value: 3.89% of GDP, which is 17.7% of 2064 spending. 
Social Security value: 6.56% of GDP, which is 29.9% of 2064 spending. 

2065: Total value: 22.19% of GDP. 
Medicare value: 11.68% of GDP, which is 52.6% of 2065 spending. 
Medicaid value: 3.94% of GDP, which is 17.8% of 2065 spending. 
Social Security value: 6.57% of GDP, which is 29.6% of 2065 spending. 

2066: Total value: 22.43% of GDP. 
Medicare value: 11.86% of GDP, which is 52.9% of 2066 spending. 
Medicaid value: 3.99% of GDP, which is 17.8% of 2066 spending. 
Social Security value: 6.58% of GDP, which is 29.3% of 2066 spending. 

2067: Total value: 22.66% of GDP. 
Medicare value: 12.03% of GDP, which is 53.1% of 2067 spending. 
Medicaid value: 4.04% of GDP, which is 17.8% of 2067 spending. 
Social Security value: 6.59% of GDP, which is 29.1% of 2067 spending. 

2068: Total value: 22.87% of GDP. 
Medicare value: 12.19% of GDP, which is 53.3% of 2068 spending. 
Medicaid value: 4.09% of GDP, which is 17.9% of 2068 spending. 
Social Security value: 6.59% of GDP, which is 28.8% of 2068 spending. 

2069: Total value: 23.08% of GDP. 
Medicare value: 12.35% of GDP, which is 53.5% of 2069 spending. 
Medicaid value: 4.14% of GDP, which is 17.9% of 2069 spending. 
Social Security value: 6.59% of GDP, which is 28.6% of 2069 spending. 

2070: Total value: 23.3% of GDP. 
Medicare value: 12.51% of GDP, which is 53.7% of 2070 spending. 
Medicaid value: 4.19% of GDP, which is 18.0% of 2070 spending. 
Social Security value: 6.6% of GDP, which is 28.3% of 2070 spending. 

2071: Total value: 23.53% of GDP. 
Medicare value: 12.68% of GDP, which is 53.9% of 2071 spending. 
Medicaid value: 4.25% of GDP, which is 18.1% of 2071 spending. 
Social Security value: 6.6% of GDP, which is 28.0% of 2071 spending. 

2072: Total value: 23.74% of GDP. 
Medicare value: 12.84% of GDP, which is 54.1% of 2072 spending. 
Medicaid value: 4.3% of GDP, which is 18.1% of 2072 spending. 
Social Security value: 6.6% of GDP, which is 27.8% of 2072 spending. 

2073: Total value: 23.97% of GDP. 
Medicare value: 13.01% of GDP, which is 54.3% of 2073 spending. 
Medicaid value: 4.35% of GDP, which is 18.1% of 2073 spending. 
Social Security value: 6.61% of GDP, which is 27.6% of 2073 spending. 

2074: Total value: 24.19% of GDP. 
Medicare value: 13.17% of GDP, which is 54.4% of 2074 spending. 
Medicaid value: 4.41% of GDP, which is 18.2% of 2074 spending. 
Social Security value: 6.61% of GDP, which is 27.3% of 2074 spending. 

2075: Total value: 24.41% of GDP. 
Medicare value: 13.34% of GDP, which is 54.6% of 2075 spending. 
Medicaid value: 4.46% of GDP, which is 18.3% of 2075 spending. 
Social Security value: 6.61% of GDP, which is 27.1% of 2075 spending. 

2076: Total value: 24.639% of GDP. 
Medicare value: 13.509% of GDP, which is 54.8% of 2076 spending. 
Medicaid value: 4.52% of GDP, which is 18.3% of 2076 spending. 
Social Security value: 6.61% of GDP, which is 26.8% of 2076 spending. 

2077: Total value: 24.869% of GDP. 
Medicare value: 13.679% of GDP, which is 55.0% of 2077 spending. 
Medicaid value: 4.57% of GDP, which is 18.4% of 2077 spending. 
Social Security value: 6.62% of GDP, which is 26.6% of 2077 spending. 

2078: Total value: 25.1% of GDP. 
Medicare value: 13.85% of GDP, which is 55.2% of 2078 spending. 
Medicaid value: 4.63% of GDP, which is 18.4% of 2078 spending. 
Social Security value: 6.62% of GDP, which is 26.4% of 2078 spending. 

2079: Total value: 25.16% of GDP. 
Medicare value: 13.85% of GDP, which is 55.0% of 2079 spending. 
Medicaid value: 4.69% of GDP, which is 18.6% of 2079 spending. 
Social Security value: 6.62% of GDP, which is 26.3% of 2079 spending. 

2080: Total value: 25.23% of GDP. 
Medicare value: 13.85% of GDP, which is 54.9% of 2080 spending. 
Medicaid value: 4.75% of GDP, which is 18.8% of 2080 spending. 
Social Security value: 6.63% of GDP, which is 26.3% of 2080 spending. 

Note: Social Security and Medicare projections based on the 
intermediate assumptions of the 2004 Trustees’ Reports. Medicaid 
projections based on CBO’s January 2004 short-term Medicaid estimates 
and CBO’s December 2003 long-term Medicaid projections under mid-range 
assumptions. 

Source: GAO analysis based on data from the Office of the Chief 
Actuary, Social Security Administration, Office of the Actuary, Centers 
for Medicare and Medicaid Services, and the Congressional Budget 
Office. 

[End of figure]

U.S. Elderly Dependency Ratio Expected to Continue to Increase: 

[See PDF for image] –graphic text: 

Line chart with one line and five items.

Year: 1950; 
Elderly Dependency Ratio (in percent): 13%. 

Year: 1980; 
Elderly Dependency Ratio (in percent): 17%. 

Year: 2000; 
Elderly Dependency Ratio (in percent): 19%. 

Year: 2030; 
Elderly Dependency Ratio (in percent): 33%. 

Year: 2050; 
Elderly Dependency Ratio (in percent): 35%.

Source: Population Division of the Department of Economic and Social 
Affairs of the United Nations Secretariat, World Population Prospects: 
2000 Revision and World Urbanization Prospects: 2001 Revision. Data for 
2030 - 2050 are projected.

[End of figure]

U.S. Labor Force Growth Will Continue to Decline: 

[See PDF for image] –graphic text: 

Line chart with one line and 111 items.

Year: 1970; 
Percentage change (5-year moving average): 2.38%. 

Year: 1971; 
Percentage change (5-year moving average): 2.56%. 

Year: 1972; 
Percentage change (5-year moving average): 2.64%. 

Year: 1973; 
Percentage change (5-year moving average): 2.52%. 

Year: 1974; 
Percentage change (5-year moving average): 2.64%. 

Year: 1975; 
Percentage change (5-year moving average): 2.6%. 

Year: 1976; 
Percentage change (5-year moving average): 2.72%. 

Year: 1977; 
Percentage change (5-year moving average): 2.68%. 

Year: 1978; 
Percentage change (5-year moving average): 2.66%. 

Year: 1979; 
Percentage change (5-year moving average): 2.48%. 

Year: 1980; 
Percentage change (5-year moving average): 2.18%. 

Year: 1981; 
Percentage change (5-year moving average): 1.76%. 

Year: 1982; 
Percentage change (5-year moving average): 1.58%. 

Year: 1983; 
Percentage change (5-year moving average): 1.54%. 

Year: 1984; 
Percentage change (5-year moving average): 1.64%. 

Year: 1985; 
Percentage change (5-year moving average): 1.7%. 

Year: 1986; 
Percentage change (5-year moving average): 1.76%. 

Year: 1987; 
Percentage change (5-year moving average): 1.76%. 

Year: 1988; 
Percentage change (5-year moving average): 1.74%. 

Year: 1989; 
Percentage change (5-year moving average): 1.4%. 

Year: 1990; 
Percentage change (5-year moving average): 1.34%. 

Year: 1991; 
Percentage change (5-year moving average): 1.2%. 

Year: 1992; 
Percentage change (5-year moving average): 1.12%. 

Year: 1993; 
Percentage change (5-year moving average): 1%. 

Year: 1994; 
Percentage change (5-year moving average): 1.16%. 

Year: 1995; 
Percentage change (5-year moving average): 1.24%. 

Year: 1996; 
Percentage change (5-year moving average): 1.28%. 

Year: 1997; 
Percentage change (5-year moving average): 1.24%. 

Year: 1998; 
Percentage change (5-year moving average): 1.5%. 

Year: 1999; 
Percentage change (5-year moving average): 1.42%. 

Year: 2000; 
Percentage change (5-year moving average): 1.22%. 

Year: 2001; 
Percentage change (5-year moving average): 1.26%. 

Year: 2002; 
Percentage change (5-year moving average): 1.28%. 

Year: 2003; 
Percentage change (5-year moving average): 1.14%. 

Year: 2004; 
Percentage change (5-year moving average): 1.24%. 

Year: 2005; 
Percentage change (5-year moving average): 1.3%. 

Year: 2006; 
Percentage change (5-year moving average): 1.26%. 

Year: 2007; 
Percentage change (5-year moving average): 1.18%. 

Year: 2008; 
Percentage change (5-year moving average): 1.02%. 

Year: 2009; 
Percentage change (5-year moving average): 0.92%. 

Year: 2010; 
Percentage change (5-year moving average): 0.82%. 

Year: 2011; 
Percentage change (5-year moving average): 0.74%. 

Year: 2012; 
Percentage change (5-year moving average): 0.66%. 

Year: 2013; 
Percentage change (5-year moving average): 0.6%. 

Year: 2014; 
Percentage change (5-year moving average): 0.52%. 

Year: 2015; 
Percentage change (5-year moving average): 0.48%. 

Year: 2016; 
Percentage change (5-year moving average): 0.44%. 

Year: 2017; 
Percentage change (5-year moving average): 0.42%. 

Year: 2018; 
Percentage change (5-year moving average): 0.38%. 

Year: 2019; 
Percentage change (5-year moving average): 0.36%. 

Year: 2020; 
Percentage change (5-year moving average): 0.34%. 

Year: 2021; 
Percentage change (5-year moving average): 0.3%. 

Year: 2022; 
Percentage change (5-year moving average): 0.26%. 

Year: 2023; 
Percentage change (5-year moving average): 0.24%. 

Year: 2024; 
Percentage change (5-year moving average): 0.22%. 

Year: 2025; 
Percentage change (5-year moving average): 0.2%. 

Year: 2026; 
Percentage change (5-year moving average): 0.2%. 

Year: 2027; 
Percentage change (5-year moving average): 0.2%. 

Year: 2028; 
Percentage change (5-year moving average): 0.2%. 

Year: 2029; 
Percentage change (5-year moving average): 0.22%. 

Year: 2030; 
Percentage change (5-year moving average): 0.24%. 

Year: 2031; 
Percentage change (5-year moving average): 0.26%. 

Year: 2032; 
Percentage change (5-year moving average): 0.28%. 

Year: 2033; 
Percentage change (5-year moving average): 0.3%. 

Year: 2034; 
Percentage change (5-year moving average): 0.3%. 

Year: 2035; 
Percentage change (5-year moving average): 0.3%. 

Year: 2036; 
Percentage change (5-year moving average): 0.3%. 

Year: 2037; 
Percentage change (5-year moving average): 0.3%. 

Year: 2038; 
Percentage change (5-year moving average): 0.3%. 

Year: 2039; 
Percentage change (5-year moving average): 0.3%. 

Year: 2040; 
Percentage change (5-year moving average): 0.3%. 

Year: 2041; 
Percentage change (5-year moving average): 0.3%. 

Year: 2042; 
Percentage change (5-year moving average): 0.3%. 

Year: 2043; 
Percentage change (5-year moving average): 0.3%. 

Year: 2044; 
Percentage change (5-year moving average): 0.3%. 

Year: 2045; 
Percentage change (5-year moving average): 0.3%. 

Year: 2046; 
Percentage change (5-year moving average): 0.28%. 

Year: 2047; 
Percentage change (5-year moving average): 0.26%. 

Year: 2048; 
Percentage change (5-year moving average): 0.24%. 

Year: 2049; 
Percentage change (5-year moving average): 0.22%. 

Year: 2050; 
Percentage change (5-year moving average): 0.2%. 

Year: 2051; 
Percentage change (5-year moving average): 0.2%. 

Year: 2052; 
Percentage change (5-year moving average): 0.2%. 

Year: 2053; 
Percentage change (5-year moving average): 0.2%. 

Year: 2054; 
Percentage change (5-year moving average): 0.2%. 

Year: 2055; 
Percentage change (5-year moving average): 0.2%. 

Year: 2056; 
Percentage change (5-year moving average): 0.2%. 

Year: 2057; 
Percentage change (5-year moving average): 0.2%. 

Year: 2058; 
Percentage change (5-year moving average): 0.2%. 

Year: 2059; 
Percentage change (5-year moving average): 0.2%. 

Year: 2060; 
Percentage change (5-year moving average): 0.2%. 

Year: 2061; 
Percentage change (5-year moving average): 0.2%. 

Year: 2062; 
Percentage change (5-year moving average): 0.2%. 

Year: 2063; 
Percentage change (5-year moving average): 0.2%. 

Year: 2064; 
Percentage change (5-year moving average): 0.2%. 

Year: 2065; 
Percentage change (5-year moving average): 0.2%. 

Year: 2066; 
Percentage change (5-year moving average): 0.2%. 

Year: 2067; 
Percentage change (5-year moving average): 0.2%. 

Year: 2068; 
Percentage change (5-year moving average): 0.2%. 

Year: 2069; 
Percentage change (5-year moving average): 0.2%. 

Year: 2070; 
Percentage change (5-year moving average): 0.2%. 

Year: 2071; 
Percentage change (5-year moving average): 0.2%. 

Year: 2072; 
Percentage change (5-year moving average): 0.2%. 

Year: 2073; 
Percentage change (5-year moving average): 0.2%. 

Year: 2074; 
Percentage change (5-year moving average): 0.2%. 

Year: 2075; 
Percentage change (5-year moving average): 0.2%. 

Year: 2076; 
Percentage change (5-year moving average): 0.2%. 

Year: 2077; 
Percentage change (5-year moving average): 0.2%. 

Year: 2078; 
Percentage change (5-year moving average): 0.2%. 

Year: 2079; 
Percentage change (5-year moving average): 0.2%. 

Year: 2080; 
Percentage change (5-year moving average): 0.2%.

Note: Percentage change is calculated as a centered 5-yr moving average 
of projections based on the intermediate assumptions of the 2004 
Trustees Reports.

Source: GAO analysis of data from the Office of the Chief Actuary, 
Social Security Administration.

[End of figure]

Key Dates Highlight Long Term Challenges of the Social Security System: 

Date: 2008; 
Event: Social Security cash surplus begins to decline. 

Date: 2018; 
Event: Annual benefit costs exceed cash revenue from taxes. 

Date: 2028; 
Trust fund ceases to grow because even taxes plus interest fall short 
of benefits. 

Date: 2042 (SSA); 2052 (CBO); 
Event: Trust fund exhausted, annual revenues sufficient to pay about 
73%-81% of promised benefits. 

Sources: Social Security Administration, The 2004 Annual Report of the 
Board of Trustees of the Federal Old-Age and Survivors Insurance and 
Disability Insurance Trust Funds. Washington, DC, March 2004. 
Congressional Budget Office, The Outlook for Social Security: Potential 
Range of Social Security Outlays and Revenues Under Current Law. 
Washington, DC, June 2004.

[End of table] 

Different Measures, Same Challenge: 

75-year projection of funding shortfall:
* $3.7 trillion in present value;
* 0.7% of GDP;
* 1.8% of taxable payroll. 

Infinite horizon projection of funding shortfall:
* $10.4 trillion in present value;
* 1.2% of GDP;
* 3.5% of taxable payroll.

Source: Social Security Administration, The 2004 Annual Report of the 
Board of Trustees of the Federal Old-Age and Survivors Insurance and 
Disability Insurance Trust Funds (Washington D.C.: March 2004).   
Social Security Reform Elements: 

Reform proposals should be evaluated as packages that strike a balance 
among individual reform elements and important interactive effects, 
including consideration of both funded and promised benefit levels. 

Comprehensive proposals can be evaluated against three basic criteria: 

* Financing sustainable solvency; 

* Balancing adequacy and equity in the benefits structure; 

* Implementing and administering reforms. 

Key Elements for Economic Security in Retirement: 

Adequate retirement income: 
* Social Security;
* Pensions;
* Savings;
* Earnings from continued employment (e.g., part-time).

Affordable health care: 
* Medicare;
* Retiree health care;

Long-term care (a hybrid).

Major Players: 
* Employers;
* Government;
* Individuals;
* Family;
* Community. 

Composition of Spending as a Share of GDP Under Baseline Extended: 

[See PDF for image] -graphic text

Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars 
per group.

2003;
All other spending; Percent of GDP: 10.3%; 
Medicare & Medicaid; Percent of GDP: 3.8%; 
Social Security; Percent of GDP: 4.4%; 
Net interest; Percent of GDP: 1.4%; 
Revenue; Percent of GDP: 16.4%.

2015;
All other spending; Percent of GDP: 8.5%; 
Medicare & Medicaid; Percent of GDP: 5.4%; 
Social Security; Percent of GDP: 4.8%; 
Net interest; Percent of GDP: 1.8%; 
Revenue; Percent of GDP: 19.8%.

2030;
All other spending; Percent of GDP: 8.5%; 
Medicare & Medicaid; Percent of GDP: 8.1%; 
Social Security; Percent of GDP: 6.7%; 
Net interest; Percent of GDP: 3.3%; 
Revenue; Percent of GDP: 19.8%.

2040;
All other spending; Percent of GDP: 8.5%; 
Medicare & Medicaid; Percent of GDP: 9.9%; 
Social Security; Percent of GDP: 7.4%; 
Net interest; Percent of GDP: 6.8%; 
Revenue; Percent of GDP: 19.8%.

Notes: In addition to the expiration of tax cuts, revenue as a share of 
GDP increases through 2014 due to (1) real bracket creep, (2) more 
taxpayers becoming subject to the AMT, and (3) increased revenue from 
tax-deferred retirement accounts. After 2014, revenue as a share of GDP 
is held constant. Budgetary effects due to passage of the Working 
Families Tax Relief Act of 2004 are not reflected in this simulation.

Source: GAO’s September 2004 analysis.

[End of figure]

Composition of Spending as a Share of GDP Assuming Discretionary 
Spending Grows with GDP After 2004 and All Expiring Tax Provisions Are 
Extended: 

[See PDF for image] -graphic text

Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars 
per group.

2003; 
All other spending; Percent of GDP: 10.3%; 
Medicare & Medicaid; Percent of GDP: 3.8%; 
Social Security; Percent of GDP: 4.4%; 
Net interest; Percent of GDP: 1.4%; 
Revenue; Percent of GDP: 16.4%.

2015; 
All other spending; Percent of GDP: 9.8%; 
Medicare & Medicaid; Percent of GDP: 5.4%; 
Social Security; Percent of GDP: 4.9%; 
Net interest; Percent of GDP: 3%; 
Revenue; Percent of GDP: 17.4%.

2030; 
All other spending; Percent of GDP: 9.8%; 
Medicare & Medicaid; Percent of GDP: 8.1%; 
Social Security; Percent of GDP: 7.1%; 
Net interest; Percent of GDP: 8.5%; 
Revenue; Percent of GDP: 17.4%.

2040; 
All other spending; Percent of GDP: 9.8%; 
Medicare & Medicaid; Percent of GDP: 9.9%; 
Social Security; Percent of GDP: 8.6%; 
Net interest; Percent of GDP: 17.8%; 
Revenue; Percent of GDP: 17.4%.

Notes: Although expiring tax provisions are extended, revenue as a 
share of GDP increases through 2014 due to (1) real bracket creep, (2) 
more taxpayers becoming subject to the AMT, and (3) increased revenue 
from tax-deferred retirement accounts. After 2014, revenue as a share 
of GDP is held constant. 

Source: GAO’s September 2004 analysis.

[End of figure]

Social Security: The Bottom Line: 

Illustrative Questions and Answers Based on the Latest Trustees’ 
Reports: 

* Does Social Security have a financing problem? [Yes]

* Will the Social Security program ever go bust? [No]

* Will the Social Security trust fund balance ever be exhausted? [Yes]

* Should the trust fund solvency date be the primary action-forcing 
event for Social Security reform? [No]

* What other factors should be considered?
- Cash flow;
- Total unfunded commitments;
- Percent of the budget and GDP;
- Percent of taxable payroll.

* Should we act sooner rather than later to reform Social Security? 
[Yes]
- Time is working against us;
- We have an opportunity to exceed the expectations of every generation 
of Americans;
- We have bigger problems that we ultimately will have to address;
- A successful reform effort would help to improve the credibility of 
government and enhance confidence in government;

* Will individual accounts solve the problem by themselves? [No]

* Should they be considered as part of a more comprehensive reform 
proposal? [Yes]

* What other types of reforms need to be considered?
- Strengthening progressivity (e.g., replacement rates);
- Indexing formulas;
- Retirement ages;
- Tax base and rates.

* What is an example of a government retirement system that includes 
private accounts? [The Federal Thrift Savings Plan]

* Would individual accounts involve significant transition costs? [Yes]

* What other possible implications would individual accounts have?
- Personal savings rate;
- Rates of return on Social Security payroll taxes;
- Pre- and post-retirement survivors’ benefits;
- Savings and investment education;
- Supplemental retirement savings vehicle;

* Should we consider both promised and funded benefits in analyzing 
Social Security Reform proposals? [Yes]

* Should we consider both cash and present value related costs and 
implications of Social Security reform proposals? [Yes]

* Can Social Security reform exceed the expectations of all generations 
of Americans? [Yes]

* Does the Social Security reform process matter? [Yes]

* Should Social Security be about the public good versus political 
gain? [Yes]

[End of slide presentation]