Powered by 
The Social Security trustees are supposed to release their annual report on April 1 every year. It’s early June, and we’re still waiting. When it’s finally released, the headline will mirror what it said last year: “The Social Security trust funds run out in 2033.” After that, the law allows the program to pay only what incoming payroll taxes cover, which would leave an automatic benefit cut of about 20 percent for all existing beneficiaries.
That story is real and indeed important. But there is a subtle byproduct of the trust funds running out: we’re sending out more in benefits than we currently receive.
Where does that money come from? What is Social Security doing to federal deficits? And how big is the problem going to get?
The plot
The structure of the Social Security trust funds means that while the program was collecting more in taxes than it was paying out in benefits, it was relieving pressure on the federal debt by providing funds the government could borrow from itself and not the open market. For a few decades, payroll taxes were larger than benefits owed, leading to less federal borrowing necessary.
But things changed in 2010, when the amount of benefits paid overtook the amount of payroll taxes collected on a cash basis. At that point, the government had to find money elsewhere to cover the balance. Until 2021, the amount it paid itself on interest from reserves from the trust funds sufficed. And in 2024, the cumulative contribution to federal borrowing went negative.
So how much larger are deficits now because of the cash deficit being run by Social Security?
This year, Social Security’s cash shortfall leads to extra borrowing of $362 billion. That’s roughly equivalent to all of the federal income-security programs like SNAP, EITC, the child tax credit, SSI, and unemployment benefits combined.
From 2024 to 2033, the cash shortfall will total an estimated $4.3 trillion in deficit financing. (And that doesn’t consider larger interest payments from new debt that the deficits will require.)
The point
So how much of the deficit and the debt is Social Security responsible for? The honest answer, looking backward, is almost none. Looking forward is when things get scary.
For roughly a quarter century, Social Security’s structure helped finance the rest of the government, and in doing so it made the reported deficits of the 1980s, 1990s, and 2000s look smaller than the government’s true operating gap. The roughly $2.7 trillion credited in the trust fund today, often described as money Congress is “raiding,” is better understood as debt the rest of the government owes back to Social Security.
And the bill is coming due. Federal deficits are currently around 6 percent of GDP. Social Security represents 20 percent of that deficit (1.2 percent of GDP in 2026). By 2033, it’ll be a deficit of 1.7 percent of GDP.
So much for a fully funded program.
Notes on calculations
The Social Security Administration reports data in calendar years, while the federal budget operates in fiscal years. Data reported here are all in calendar years.
Historical figures combine the OASI and DI trust funds from the Social Security administration’s single-year operations tables.
Cash balance is non-interest income, meaning payroll tax contributions plus the taxation of benefits plus small general-fund transfers, minus total cost.
Interest credited to the trust fund is excluded because it is an intragovernmental transfer that does not affect debt held by the public.
Projections for 2025 through 2033 come from the 2025 Trustees Report, Table VI.G4, under the intermediate assumptions, and reflect scheduled (promised) benefits.
The 2024-to-2025 jump partly reflects the Social Security Fairness Act, signed in January 2025, which repealed the Windfall Elimination Provision and the Government Pension Offset and concentrated some retroactive payments in 2025.
Debt figures are from the Treasury via FRED.
Tom Church is a policy fellow at the Hoover Institution. He studies health care policy, entitlement reform, and the federal budget. Along with Daniel Heil and Lanhee Chen, he is a co-author of “Choices for All,” a set of commonsense health care reforms. He participates in Hoover’s Healthcare Policy Working Group, Fiscal Policy Initiative, and the Tennenbaum Program for Fact-Based Policy.