Media inquiries: Veronique Rodman
202.862.4871 (vrodman@aei.org)

FOR IMMEDIATE RELEASE: March 27,2008 

AEI resident scholar Andrew G. Biggs was, until February 2008, the principal deputy commissioner of the Social Security Administration (SSA) and secretary of the Board of Trustees of the Social Security program. While at SSA, he led the agency's staff representation to the Social Security Trustees working group.

Mr. Biggs had the following to say about the just released 2008 Social Security Trustees report:

• In today's report, the Trustees project that Social Security will continue to run surpluses until 2017 and that the trust fund will remain solvent until 2041, both the same as in the 2007 report.
• However, the 2008 report also details an improved financial outlook for the Social Security program: the Trustees conclude that the seventy-five-year outlook has actually improved. Smaller Social Security deficits in the years after 2041 will reduce the long-term shortfall from 1.95 percent of future wages, as announced in the 2007 Trustees report, to 1.70 percent of future wages. A shortfall of 1.70 percent of wages means than an immediate and permanent increase of 1.7 percent in the payroll tax--from 12.4 percent of wages to 14.1 percent--would keep the program solvent for 75 years.
• This improvement came about principally because of improvements in how the Social Security actuaries estimate the effects of immigration on the program. Current methods do a better job of tracking immigrants who work and pay taxes, but leave the country prior to collecting retirement benefits. These individuals tend to benefit the program's finances.

Said Biggs: "The improved outlook for Social Security is welcome news. For years, Congress put off fixing Social Security because the problem was seen as too large. Congress should not make the opposite mistake and delay reform because the problem now appears too small. Social Security is the largest program of the federal government, the largest tax paid by most workers and the largest income source for most retirees. Even a modest shortfall in a program this large demands corrective action."

Andrew Biggs can be reached at andrew.biggs@aei.org or at 202-862-5841.

For additional questions or any other media inquiries please contact Veronique Rodman at vrodman@aei.org or 202-862-4871.

###