Bruce Krasting has an interesting post in which he considers some intriguing discrepancies in the recent Social Security trustees’ report which may shed some light on the contents of the report but particularly on its timing. As you may recall the trustees’ report is due every April but was delayed this year until August, the announced reason for the delay being to give the trustees time to incorporate the changes effected by the healthcare reform legislation that was enacted into law earlier this year.
Here’s the opening of his post:
I have been keeping an eye on the monthly numbers for the Social Security Trust Fund for some time. The 2010 revenue numbers have been terrible. They are running 3% below last year’s very crummy results. I was anticipating that the 2010 top line would look like 2009. Unemployment has been steady at just below 10% for a long time. There was no logical explanation for the continued drop in YoY payroll tax receipts. So I was confused.
Well, apparently a reduction in receipts isn’t the only factor at work in the shortfall. Bruce also dug up a clue from the Congressional Budget Office:
Receipts from social insurance taxes are also expected to decline this year—by $29 billion (3.2 percent) from last year, mostly because of an adjustment by the Treasury to correct for the allocation of receipts in earlier years.
which matches a passage in this year’s trustees’ report:
The estimated decline in trust fund income from 2009 to 2010 is due to the economic recession and to an expected $25billion downward adjustment to 2010 income that corrects for excess payroll tax revenue credited to the Trust Funds in earlier years.
Read the whole thing.
The intriguing part of this is, had the trustees’ report been delayed longer, the $25 billion discrepancy would have become apparent through an unexpected and unexplainable jump in revenues in October. Presumably, that would have caused some undesireable consternation.
For the first third of 2009 U-3 (SA) unemployment was under 9%. So a drop in revenue in 2010 wrt 2009 should have been expected. And the U-6 (SA) numbers didn’t really level out until June of 2009. Rough estimates would seem to indicate that revenue for the first four or five months of 2010 compared to 2009 should have dropped about 1% in any event. None of this accounts for declines in real wages, either. I’m almost wondering if they aren’t over-stating their revenues again.
(I’m also too lazy to look at the non-SA adjusted numbers, which might be more important for this calculation. Plus I stopped keeping track of the non-SA data after February 2010. A quick glance at what I do have would seem to make the y-o-y change even more significant in the downward direction.)
And the UE rates also ignore that participation rates have also dropped significantly over the last year. THe more I think about this the more I am wondering why revenues aren’t even lower this year.
How good are they at tracking the contributions of illegals? If, as some numbers have suggested, illegals are leaving because of economic conditions, would that not decrease SS revenue?
Steve