The Social Security Trustees just released their 2008 report. The Trustees predict that Social Security will run surpluses until 2017. The trust fund will remain solvent until 2041. Both figures are the same from last year’s report.
But here is a key difference: The 75 year forecast projects smaller deficits in the years following 2041. The improvements come thanks to immigrants that work and pay taxes, but return home before collecting benefits. The contribution of these immigrants reduces the system’s long-term shortfall from 1.95% of future wages to 1.70%–a dramatic difference. According to Andrew G. Biggs, formerly principal deputy commissioner of the Social Security Administration and currently a scholar with the American Enterprise Institute, that means an immediate and permanent increase of 1.7% in the payroll tax–from 12.4% of wages to 14.1%–would keep the program solvent for 75 years.
Of course, not everyone agrees that’s what we should do. But the notion that there is a Social Security crisis, well, there isn’t one.