Thread by @kathleenromig

This mini thread is for my #SocialSecurity nerds who want to know what changed in this year's Trustees' Report. 🧵

Again, Social Security's overall outlook is clear & the TRs tell a consistent story. But there are minor changes each year. Let's look. 1/

https://twitter.com/kathleenromig/status/1641834126780104705

Social Security's trustees measure the program's long-term shortfall as a percent of taxable payroll. In the 2023 Trustees' Report, it's -3.42 percent. That's a change of 0.19 percentage points from last year's report. 2/

The report helpfully breaks out what's different.

The biggest change comes from updated methodology. That made Social Security's financing gap 0.06 pp worse, on net, compared to last year's report. But obviously using updated methodology is good! Yay, actuaries! 3/

Next is the updated "valuation period," which worsens the gap by 0.05 pp.

The TR projects over 75 years. So each TR adds a year in which deficits are relatively large, increasing the 75-year gap--even if the shortfall in each individual year of the projection stays the same. 4/

Next is economic data/assumptions, which worsen the gap by 0.04 pp, on net.

There's a lot going on here! The biggest change is that due to higher-than-expected inflation & lower-than-expected output, the trustees are assuming lower GDP & productivity, worsening the outlook. 5/

Then there is demographic data/assumptions, which worsen the gap by 0.03 percent of taxable payroll, on net.

Lower-than-expected birth rates worsen the outlook. Higher-than-expected death rates improve the outlook (but are obviously bad!!). Updated data contributes too. 6/

Finally, there is disability data/assumptions, which actually *improves* the gap by 0.01 percent of taxable payroll.

That reflects lower actual disability benefit receipt than expected, and an update to short-term assumptions about the rate of disability benefit receipt. 7/

So there's no huge story about why Social Security's financial outlook changed (slightly!) from last year.

The changes are mostly technical--over half from updating the methodology & valuation period. The rest is a complicated mix of pretty small & offsetting factors. 8/8

PS I realize in my second tweet I didn't clarify that it's a change of *negative* 0.19 percentage points from last year's report, on net.