Last month, I explored the very-disappointing preliminary Social Security numbers, using the December Monthly Treasury Statement and the investment holdings report from the Social Security Administration. The time-series report for December 2009 from the SSA’s Office of the Chief Actuary is finally available, and the news is even worse.
First, a note; while the other reports included an acceleration of some Social Security payments from January into December, the time-series report does not. That allows an “apples-to-apples” comparison of both monthly and yearly changes.
Also, I still don’t have a satisfactory answer why the various numbers given for the trust fund assets don’t reconcile. I don’t expect to be able to give an explanation until the January time-series numbers are released.
Total income, including $58.514 billion in misleadingly-labeled “interest” was $105.475 billion in December, both within the margin of rounding of my earlier numbers. Total outgo was $58.268 billion, which while higher than the margin of rounding than my earlier estimate is still within the margin of estimation. That makes the December primary (cash) deficit a record $11.307 billion (nearly double the previous modern-day record set in November 2009 and more than double the primary deficit in December 2008), and the 2009 calendar-year primary surplus only $3.338 billion, easily the worst modern-day 12-month performance.
Now, the bad news. Unless January and February revenues increase by at least 2.75% over the revenues received in those months in 2009, Social Security will be running 12-month primary deficits by February. Unfortunately, the total tax take doesn’t exactly suggest that level of short-term turnaround is in the cards. The January 29, 2010 Daily Treasury Report (the last business day in January) has January 2010 total tax revenues at $156 billion, down from January 2009’s $168 billion and January 2008’s $181 billion. While the January 2009 Social Security income was about 2.2% higher than the January 2008 income because the recession affected high-income earners disproportionately, this year’s total tax drop is greater than last year’s.
Projecting forward through the rest of 2010, the situation is even more bleak. It will take an over-4% increase in tax revenue each and every month this year for Social Security to be above the break-even line at the end of the year, and that only knocks the underwater point to sometime in 2011.
The ugly is that does not take into account the $250 “makeup” checks Obama wants to hand out to everybody on Social Security because there was no cost-of-living increase this year. That’s a drain of $13.5 billion, or a bit short of a quarter of the monthly outgo.
