EFFECT OF SOCIAL SECURITY REFORM ON DEBTS AND DEFICITS: 1998-2004
(as proposed in the U.S. Budget for fiscal year 2000)
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PROJECTED DEBTS (in billions of dollars)
W/O SOC SEC REFORM WITH SOC SEC REFORM CHANGE WITH REFORM
---------------------- ---------------------- ----------------------
Gross Gov't Public Gross Gov't Public Gross Gov't Public
Year Debt Debt Debt Debt Debt Debt Debt Debt Debt
---- ---------------------- ---------------------- ----------------------
1998 5478.7 1758.8 3719.9 5478.7 1758.8 3719.9 0.0 0.0 0.0
1999 5614.9 1945.2 3669.7 5614.9 1945.2 3669.7 0.0 0.0 0.0
2000 5711.4 2139.5 3571.8 5831.2 2226.8 3604.4 119.8 87.3 32.6
2001 5781.4 2326.3 3455.0 6043.0 2495.7 3547.3 261.6 169.4 92.3
2002 5815.3 2530.4 3285.0 6277.5 2811.9 3465.6 462.2 281.5 180.6
2003 5855.6 2736.3 3119.3 6520.8 3133.8 3386.9 665.2 397.5 267.6
2004 5874.4 2947.9 2926.4 6776.0 3486.3 3289.6 901.6 538.4 363.2
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PROJECTED SURPLUSES OR DEFICITS(-) (in billions of dollars)
W/O SOC SEC REFORM WITH SOC SEC REFORM CHANGE WITH REFORM
---------------------- ---------------------- ----------------------
Gross Gov't Public Gross Gov't Public Gross Gov't Public
Year Deficit Deficit Surplus Deficit Deficit Surplus Deficit Deficit Surplus
---- ---------------------- ---------------------- ----------------------
1999 -136.2 -186.4 50.1 -136.2 -186.4 50.1 0.0 0.0 0.0
2000 -96.5 -194.3 97.9 -216.3 -281.6 65.4 -119.8 -87.3 -32.5
2001 -70.0 -186.8 116.8 -211.8 -268.9 57.1 -141.8 -82.1 -59.7
2002 -33.9 -204.1 170.1 -234.5 -316.2 81.7 -200.6 -112.1 -88.4
2003 -40.3 -205.9 165.7 -243.3 -321.9 78.7 -203.0 -116.0 -87.0
2004 -18.8 -211.6 192.9 -255.2 -352.5 97.3 -236.4 -140.9 -95.6
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EFFECT OF SOCIAL SECURITY REFORM ON SURPLUS REPAID TO PUBLIC
(in billions of dollars)
1999 2000 2001 2002 2003 2004
---------------------------------------------
Public Surplus W/O Reform. 50.1 97.9 116.8 170.1 165.7 192.9
Soc Sec stock purchases... 0.0 -18.2 -15.9 -21.1 -22.1 -27.2
Universal Savings Accounts 0.0 -14.0 -15.9 -21.9 -20.9 -23.6
Military readiness, etc... 0.0 0.0 -26.3 -40.9 -36.5 -34.1
Financing costs........... 0.0 -0.3 -1.7 -4.3 -7.5 -10.6
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Public Surplus With Reform 50.1 65.4 57.1 81.7 78.7 97.3
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EFFECT OF SOCIAL SECURITY REFORM ON DEFICIT OWED TO GOVERNMENT ACCOUNTS
(in billions of dollars)
1999 2000 2001 2002 2003 2004
---------------------------------------------
Gov't Deficit W/O Reform.. -186.4 -194.3 -186.8 -204.1 -205.9 -211.6
Transfers to Soc Sec fund. 0.0 -84.7 -69.9 -91.6 -90.3 -108.9
Less: SS stock purchases.. 0.0 18.2 15.9 21.1 22.1 27.2
Transfers to Medicare fund 0.0 -18.3 -20.3 -28.1 -26.9 -30.4
Other..................... 0.0 -2.5 -7.8 -13.5 -20.9 -28.8
---------------------------------------------
Gov't Deficit With Reform. -186.4 -281.6 -268.9 -316.2 -321.9 -352.5
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Note: the Other category was not specified; it likely consists of the
financing costs of the additional government debt
Source: Budget of the United States Government, FY 2000:
Analytical Perspectives, table 12-2 (without Soc Sec reform),
Summary Table S-14 (with Soc Sec reform)
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Among the points that the above tables illustrate are the following:
1) The gross federal debt (which equals the public debt plus the government
debt) will go up over the next five years with or without Social Security
reform. However, its rate of increase (the gross federal deficit) will
approach zero without reform but accelerate with it. As a result, the
gross debt will increase less without reform (7.2%) than with it (23.7%).
2) The public debt will decrease with or without the reform. However, it
will decrease more without reform (21.3%) than with it (11.6%).
3) The government debt (debt owed to government accounts) will increase
with or without the reform. However, it will increase less without
reform (67.6%) than with it (98.2%).
4) The public debt will be increased (or decreased less) by the money
dedicated to Universal Savings Accounts, military readiness, stock
purchases by Social Security, and the financing costs of the additional
public debt. This is because this is money that would otherwise be used
to pay down the public debt.
5) The debt to government accounts will be increased by the money dedicated
to Social Security that does not go for stock purchases, Medicare, and
the financing costs of the additional government debt. This is because
this money will be invested in government bonds, creating more debt owed
to Social Security and Medicare.
