Earlier this month, I noted that the first set of December numbers for Social Security, the “investment” holdings, commonly called the “Trust Funds”, rose by a very-disappointing $24.153 billion in December. While the December Trust Fund Operations numbers are still not available from the Social Security Office of the Chief Actuary, the December Monthly Treasury Statement from the Department of the Treasury, which forms the basis of those numbers, is available. There is an interesting tidbit on the cover page – “Federal old-age and survivors insurance trust fund and Federal disability insurance trust fund benefit payments for January 3, 2010, were accelerated to December 31, 2009.”
That explanation of what I had hoped to be an anomaly is not entirely satisfying. First, I have to explain how I derived the numbers from the Trust Fund Operation time series – the “total income” and “total outgo” for a given month comes from the “income, outgo and assets” chart, while the “net interest” comes from the “income components” chart. The equivalent numbers on the Monthly Treasury Statement are, respectively, the “receipts” and “outlays” for each fund found in Table 8, and the “Interest Received by Trust Funds” for each fund found in the end of Table 5. While they are not 100% reconciled, the margin of difference is typically well under 1% (keep that statistic in mind).
Including the “accelerated” payments from Social Security, and also including the semi-annual crediting of “interest”, the “total income” was about $105.5 billion (of which about $58.5 billion was “interest”, in line with what was “credited” to the funds in December 2008), and the “total outlays” were about $87.7 billion, which should make the “net increase in assets” about $17.8 billion. Something is massively off, because that does not support the $24.2 billion increase in the “Trust Funds”. However, since I don’t have enough information to say what is off, all I can do until the Office of the Chief Actuary releases its numbers is note it and move on.
The total income estimate, which is 0.443% lower than it was in December 2008, is right in the ballpark of what is expected given the recent year-over-year history of the “Trust Funds”. In 2009, the 11-month average increase had been 0.271%, with the average year-over-year decrease over the prior 5 months being 0.446% and the average year-over-year decrease over the prior 3 months being 0.431%.
Accelerating a significant portion of the January 2010 payments to December 2009, which affects the total outgo of both months, makes apples-to-apples comparisons a bit “problematic”, with the December 2009 monthly change, the January 2010 monthly change, and the 12-month changes featuring only one of those months a challenge to estimate. However, calculating the recent average year-over-year change allows one to estimate what the outgo would have been without the acceleration. The average year-over-year increase in outgo was 9.648% in the first 11 months of 2009, increasing to an average year-over-year increase of 9.939% over the prior 5 months and an average year-over-year increase of 10.529% over the prior 3 months. Given that, my best estimate of the “December-only” version of total outgo is $58.1 billion.
Now it becomes possible to run a preliminary apples-to-apples comparison, with the caveat that at least one of these numbers may well be off. $105.5 billion in income (including “interest”) less $58.1 billion of “December-only” outgo and less $58.5 billion in “interest” leaves a primary “December-only” (or “unaccelerated”) monthly deficit of $11.1 billion, almost double the previous record of $5.9 billion last month. It also makes the “unaccelerated” Calendar Year 2009 primary surplus only about $3.5 billion.
Since I don’t have the usual numbers, I will not go further into analysis at this point. However, don’t be surprised if the panic button is pressed before April.