U.S. Social Security payments will exceed receipts this year for the first time in 27 years partly because of the impact of the recession but the long-range health of the program was little changed from last year, a government report said on Thursday.
Social Security is set to run a $41 billion deficit excluding interest income due to the downturn and corrections of excess revenue credited to trust funds in past years, the first shortfall since 1983, the trustees of the program said in an annual report.
Over the long term, the program that was benefiting 53 million Americans at the end of 2009 was due to exhaust its reserves in 2037 as the number of beneficiaries exceeds the number of workers paying taxes to fund it. That is the same exhaustion date as was projected in last year's report.
However, prospects for another major entitlement program brightened significantly from last year as a result of cost cuts resulting from healthcare reform legislation.
The Medicare hospital trust fund is not projected to exhaust its funds until 2029, 12 years later than forecast last year, the trustees said.