This post is a follow-up to our post of June 18, 2025 in which we addressed the magnitude of Social Security’s long-term funding hole based on results of the 2025 Trustees Report and their “intermediate assumptions.” Last week, Karen P. Glenn, the Chief Actuary of the Social Security Administration (SSA) updated the primary 2025 results in a letter to Senator Ron Wyden reflecting SSA’s understanding of the tax provisions in the One Big Beautiful Bill Act (OBBBA).
According to Ms. Glenn, passage of OBBBA increased the 75-year long-range actuarial deficit from 3.82% to 3.98% of taxable payroll under the intermediate assumptions by reducing the present value of expected OASDI tax revenue by almost $1,103 billion over the next 75 years.
Measured as the ratio of the present value of system assets to system liabilities (i.e., Funded Status) over the next 75 years, OBBBA decreased this metric from 78.3% to 77.4%.
As discussed in our post of June 18, 2025 and other previous posts, the 75-year long-range balance (and equivalent 75-year Funded Status comparison of assets to liabilities) actually overstates the system’s actual funded status (i.e., understates the long-term funding problem) because annual deficits expected after the end of the 75-year projection period are ignored. These deficits are slowly recognized in each year’s valuation (Valuation Date Creep) but, for some reason, neither the system’s Chief Actuary nor the Trustees bother to project what the long-range actuarial deficit may expected to be in the future.
Further, the intermediate assumptions used for all these calculations may be optimistic projections of future experience. If this is the case, the system’s future long-range funded status measurements will be even worse without future congressional reform.
In her letter, Ms. Glenn indicated
“Finally, note that we will be using the results provided in this letter as an updated baseline for evaluating the effects of proposals that affect the OASI and DI Trust Funds, and particularly proposals intended to extend solvency, starting now and until the issuance of the 2026 Trustees Report next year.”
We hope that Ms. Glenn and her staff receive many serious proposals to address the system’s short and long-term funding problems prior to issuance of the 2026 Trustees Report. Because of the Valuation Date Creep, we expect that the new “baseline” 3.98% long-range actuarial deficit will be in excess of 4% of taxable payroll in the 2026 report even if all assumptions are unchanged from 2025. It is way past time for Congress to address this issue.
