S.S. shortfall could occur decade later than previously thought

WASHINGTON -- Social Security's long-term prospects are better than previously thought, a congressional report said Monday, estimating the program won't become insolvent until 2052, a decade later than projected earlier this year.

The report by the nonpartisan Congressional Budget Office still paints a bleak financial picture for the future of the retirement system, which faces significant strain as the aging baby boomer generation retires.

The bipartisan trustees who oversee Social Security predicted in March that the system's shortfall would be 1.89 percent of taxable payroll, or about $3.7 trillion.

But using rosier economic assumptions over the next 75 years on such things as inflation and productivity, congressional budget forecasters said the shortfall would be 1 percent of taxable payroll.

The CBO report pegged 2019 as the year the system will start paying out more in benefits than it collects in payroll taxes -- a year later than the trustees' report.

Analysts say that date is likely more significant because the insolvency projections count on funds owed the system by the government in the so-called trust fund. Those funds, however, already have been spent and must be repaid.

Opponents of partial privatization say the new report raises questions about the severity of system's finances and undercuts Republicans' arguments for change.

"The CBO report shows just how tentative estimates about the problems of Social Security are, and how absurd it would be for policy-makers to dramatically alter the program based on those numbers," said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.

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