we have trucks. these mutual flow of goods will lead to the fact that prices will stabilize, and they will be roughly the same. that should be our ultimate goal, and i hope that eventually it will take place. >>. >> this year, the program will pay more in benefits than it receives through payroll taxes.

a recent report says the social security trust fund will run out in 2034 without legislative changes. taxes congressman chairs this meeting. >> good morning. welcome to the hearing on the status of social security trust fund. today, we'll hear from the actuary about the findings about this year's report. first it became chairman of social security in 2011. i've held that hearing many times.

at everyone i've said that social security is in trouble and it's problems only get worse. in 2011 the trustees told us that the social security trust fund would be exhausted in 2036. this year's report says 2034. that's two years earlier. if congress does not by 2034 social security will only be able to pay 79% of promised benefits. also back in 2011, the trustees told us it would take six not have trillion dollars to make social security sell them over the next years. this year, the trustees tell us it would take $13.2 trillion, more than double that amount.

as you know, social security has been paying out more in benefits than it receives in tax revenue. to make up the difference, social security would use the interest earned by the trust fund from the assets that they all. however, those days are over according to the trustees. social security is now paying out more in benefits than it receives from all of its income for the first time since 1982. this means we must tap into the trust fund to pay benefits. colleagues, this is a big deal and an important signal that time is [inaudible] our side. the trustees report is critical in providing information it needs to address social security's challenges.

however, and 12 of the last 15 years -- further, the subcommittee has looked into how this report has developed in past hearings. in addition, i know many were surprised to see the report not reflect the benefits of progrowth tax reform that we see every day. more jobs, higher wages, booming economy. historically, the trustees have been more rosy than others in their outlook in these areas. it's important to understand now how and when the trustees make economic projections that are the key to the findings in the report. it's clear that the public trustees play an important role in the development of the

report. these positions were created to make sure there were not any concerns with the objectivity and integrity of the report. yet, we have not had the benefits of the public trustees and site since july 2015. that was when their positions became vacant. that is why i, along with my good friend peter, chairman of the health subcommittee have asked gao to look at how these reports are developed, and why they are almost always late. since we do not have public trustees, gao's work can bring much-needed transparency and insight into what changes need to be made to improve the process.

congress must be able to count on these reports and have them available so they can do what it takes to fix social security. previously, and reduce my plan to fix social security permanently. my good friend from connecticut, mr. larson also has a plan that would fix social security permanently. our plans are very different, but we both agree we need to act, and act now to fix social security for good. workers and their families deserve the certainty that we have gotten social security on the right track. i know fixing social security will require tough choices that will affect the lives of millions of americans. congress has a responsibility to the american people to make

these choices. the like we wait, the harder it gets. if we wait until the trust funds are exhausted, some options won't be available. we must take this responsibility seriously. americans want, need, and deserve nothing less. i now recognize mr. larson for his opening statement. >> thank you mr. chairman. indeed, we both agree that we need to act now and have both put forward solutions that i think the american public needs to hear. let me start with something that i think every member on the committee and every member of congress, if they don't know, should know. 10000 baby boomers per day become eligible for social security. you look across the country, and you understand that issue

demands that we act now and responsibly. social security is america's insurance program. it is something the public understands eminently. why? because every week, bye week, or monthly they look at their paystub and see it under fica, the federal insurance contribution, let me repeat that. federal insurance contribution, there is a deduction that has been made. we are often here in the course of dialogue that government should run more like a business. in this case, it should run like an insurance business and be actuarially sound. the last time we address this issue actuarially, was in 1983. ronald reagan was president, tip o'neill was speaker of the house.

they made adjustments necessary to extend the life of social security. but they did not do completely. they did not index. i ask anyone on the committee or in the audience, have any of your insurance policies gone up since 1983? there is no wonder why the system is in trouble, it has not been actually adjusted since 1983. had week, or had they back then, made those adjustments, we would not be having these conversations. indeed, america's most outstanding insurance program, something that i said earlier that everybody knows about because no one has ever missed a payment. the social security system has

never missed a payment, both on the disability side which is in more of a predicament that we are in the pension site. nonetheless, both have to be addressed. how do we address them? we can do two things. we can either tell the 10000 people per day that what they have to do is face cuts. or we can say, we have to make a premium adjustment. we have to do what should've been done in 1983, and index this program. what we are proposing is to do that. for someone making $50000 per year, it cost you 50 cents a week. i like to extend social security beyond its 75 year requirement for provide enhancements and benefits that people deserve, especially women in this country, especially women of

color, who more often than not find themselves retiring into poverty. all of the problems are fixable. usually at this point i have a starbucks latte held up and i asked the elderly if they know how much it is. and i'll say $4.50. or if you're making $50000 a year, that's nine weeks of social security payments that would more than amply pay for social security to make sure we have enhancements in place for the 10000 people per day that become eligible, and for future generations into them beyond the 75 year requirement, while still making the programs both on a disability side in the pension and survivors benefit, solvent.

this should be as it was back in 1983, bipartisan effort. when you think about the fact that for 50 cents a week if you're making $50000 per year, we can solve this problem. i would love to have the american people welcome that debate so we can arrive at a conclusion that i think is in the best interest of everyone. social security is neither democrat or republican, it is american. >> thank you. as is customary, any members are welcome to submit a statement for the record. before we move on to the testimony i want to remind our witness to please limit your oral statement to five minutes. however, without objection the written testimony will be made part of the hearing record. we have one witness today. seated at the table is stephen c

goss, mr. goss, welcome back. please proceed with your testimony. >> thank you very much chairman, ranking member and members of the committee. it's a pleasure to be here to talk about the 2018 trustees report. congress by the way has received from the trustees, every single year since 1941, its annual report at trend report as required in the law. i want to thank both of you for talking about the nature of the coming shortfalls which in so many years we have discussed their large recently about the demographics. it is like it is inevitable. let me speak briefly about three major items that are the changes in the trust report compared to the less. first, based primarily on the lord then application an incidence rate through 2017, to

levels that are below the levels we achieved at the peak of the last economic cycle in 2007. the completion date extended once again from 2028 of until 2032. the depletion date despite of the fact are now seem to be rising more rapidly to the same ultimate rate is assumed in last years trustees report. in addition, a technical point, average benefit levels are now in the report projected to be somewhat lower due to changes in a mix of benefit awards resulting from what they have made in the last year from the law judge.

second, the retirement survivor has projected to be late in 2034. this is a few months earlier than the last year's report which is supposed to be early, january 2035. this is largely due to lower projected revenue and trust funds in the form of the payroll tax rates. this is due to lower than expected earnings as a share of gross domestic product in 2016 and 2017 based on the date we receive for receipts in the department of commerce registers. also, from assuming that a slightly larger share of the great shortfall we have had over the last ten years in labor productivity, that is output per hour work by american workers, slightly smaller portion will be written off as a permanent loss in the future.

even with the change i would note that projected economic growth over the next ten years is still faster than most other forecasters. third, the actual state of the long-range is similar to last year with deficit that is the percent of payroll less than expected and lower expected this is due largely from projected higher rates, legislation. the deficit was expected to rise from 2.83% last year to 2.88. however the combined effects reduce the deficit to 2.84% of payroll. if congress were not to have

full schedule benefits would not be payable that we have discussed many times. they have no borrowing authority and continuing revenue it would still be 79% of the expended benefits. for the di program they would cover 96% of that reserve completion of congress were not to act. not something we want to see, but to give you a sense of the magnitude of what the shortfall would be. the projections indicate that shortfall that needs to be corrected with your help, is slightly smaller than indicated in last year's report. i look forward to any and all questions and i appreciate the opportunity to talk to you.

>> thank you for your testimony. we now turn to questions. as customer, i will limit my time to five minutes and ask my colleagues to do the same. mr. goss, you reported that social security is now paying out more in benefits than it receives in revenue. including interest from the social security trust fund. for the first time since 1982, previously estimated this would not happen until 2022, what change? >> excellent question. what change principally is [inaudible] the benefit side. but on the revenue side. the actual revenue that we have

gotten in 2016 and 17 in the books and they turned out to be less than anticipated last year because of the share of employee compensation and needs as a share of gross domestic products have turned out to be last then the estimates. we see the same in our numbers coming in for the amount of payroll taxes indicative to the amount of earnings. there is just a smaller share by two or 3% than have been in dissipated. the good news is that while we have seen that drop off, were assuming this is a temporary effect and over the course of the next ten years we have our projections rising up to the same share of gdp that we have had in prior trustees reports. this is one of the principal effects that has caused our payroll taxes to be lower over

the next several years. this causes us to have less total income starting in 2018 rather than 2022. the other effect is that the trustees have been reluctant to make changes. and for many years having labor productivity they fall much below the growth rate expected. we expect it 1.7% the trustees have been reluctant to write off any of that in hopes that it will come back. with the economy moving ahead when i see the productivity rise as much of most other forecasters have done before them and take it one small portion of that lack productivity out of the long-term expectation that means from where we are right now the

growth has to be slower into the future. our growth in gdp is faster than virtually all other forecasters, even with a small mark off. >> seems to have a lot of accusations. i would like to hear what you think we can do about it. due to the tax cuts and jobs act and all the good news that we are seen with the economy, cbo has recently increased their projections of payroll tax revenue. can you help us understand why the trustees report is different from theirs and when you finalize the economic assumptions for each report? was it before tax reform? >> it was. what happened in this years

trustees report is because of developing report, the tax bill happen late in the last calendar year. we already had agreements about what the short range assumptions were. we did make adjustments to the projections for this first order of affect. i would note that the trustees were well aware of the possible macro effects. changes of economic growth on the trustees plan on looking deeper into that for the purpose of the upcoming 2019 trustees report. part of the reason there is a level of comfort is a projected growth is not that much in excess of others. for example, even with the latest numbers from cbo, the average annual rate of growth in

gdp between 2017 and 2027 in real terms is less than 2%. it is 1.95%. the rate of growth is at 2.43% q. about one half% faster than cbo. there is still one half of 1% slower on the rate of growth in gdp over the next ten years and the trustees are. was slower growth you will have slower growth in the amount of tax revenue coming in not only for social security but other tax revenues. >> last year's report showed a major change with respect to when the disability insurance trust fund would be exhausted. the report showed that the trust

fund would be exhausted in 2028. five years later than the trustees previous estimate. now, that date is 2032. that's a big change. you told us last year you are looking at what is causing the decrease in disability applications. what have you learned? >> i wish we could report we have a full understanding of what's going on. we reach peak applications in 2010 at the height of the effect. it's been dropping ever since. the last six or seven trustees in a row we would reach a bottom and then start coming back up. that is not happen. our applications have dropped steadily where they were over 2 million a year, to well below 1.5 million. i was share with you something

not even reflected in this report, so far in 2018 racine declines in disability applications. that is good news. the level where it now is below the number of applications we had in 2007. that was the peak year of the last economic recovery we expect to have a big drop in the number of applications, and we did. at this point in 2017 were lower and are continuing to drop. we look carefully at characteristics that might be affecting it. we've looked rule versus urban, the application rates are down across the board. it's a little surprising, and i was share particularly from the ranking member that we have done

our best to get in touch with people where there is a lot of private long-term -- and they have not been able to give us very specific they have seen drops in their disability claims rates as well. maybe somethings in the water in our society seems healthier these days. we are hopeful. >> have you learned anything? are figured out anything? or are you just babbling at us? >> what we have learned is everything we thought that would be the explanation for this, the most obvious ones do not appear to be that. there's a number of issues and we seek your advice about what your thoughts are. one thing that had occurred is there was a company which had attorneys representing individuals and they went out of

business a few years ago. whether it's a lack of national advertising we have come to understand that most attorneys are still working in those local areas and doing advertising. another possibility is that our administrative law judges have in fact been allowing a small percentage of the cases they see in their areas. as you recall, several years ago there is close to two thirds of the cases they saw were allowed benefits. now, were down to about one half. we are not sure that information has gotten out to the public and that would cause people not to file for benefits we suspect not. i will have to be honest, were

still looking carefully and studying this. we are expecting to be putting forth a technical panic of actuaries, economists and -- to look at all the assumptions we work on and disability will be high on the test. my big question is, where will it turn? we are projecting the turning point of applications going back up. what happened in each of the last for five years as it has not happened yet. part of it is the economy. the economy has been strong never have been jobs available and people working on employment rates have been very low. the percentage of our population is now back almost to the level it was at the peak of the last

economic cycle. not quite but close to full employment now. certainly that has an effect. as i mentioned before, the applications are booked substantially below where they were at the peak of the last cycle. so clearly something different is going on here. we will work more closely at it. when the applications will turn backup is critical to this. at the reserve date in 2032, they projected we could pay 96% of benefits. under the current ones if things get better we may not a plea much later than 2032. >> first of all mr. goss, thank you for your service. my grandfather used to quote

finley done all the time that said trust everyone to cut the cards, we like to say trust everyone but read the actuary reports. i thank you for the report and the analyses have done various bills. i know you look at our bill and social security 2100. does that bill strengthen social security trust fund so that it is financially sound throughout the 75 year projection? >> indeed, it does. >> i noted in my opening comments that this is going to put additional stress on the system that has not been actuarially adjusted since 1983. for given all the assumptions we go through for program i think

any rational person listening to this says have any of my other insurances gone up since 1983? the answer is yes, they have to adjust to the times and the changes. so, that is why we included in this the opportunity to first correct the cost of living so that it reflects what people who are 65 and over are experiencing. so that with that provision does that better reflect the cost for seniors if we were to go to see pie? >> it would appear that we could say that. the basic that we use now which are all wage earners of all ages, this see pie we refer to

as experimental, it's based on the purchases made by people 62 and older, essentially our clientele. it looks at patterns of what they buy. >> to have the data for the number of people, primarily women who retire into poverty? meaning, even though they have paid into the system, because they give birth to children and are absent from the workplace, and because for every dollar they were earning 77 cents, we correct that program and create a new floor for social security that is 125% above the poverty level. can you tell the panel how many people currently receive social security and remain

impoverished? >> i would have to get back to on that. i don't recall the numbers on the top of my head. the number often mentioned is the degree to which we would have people ultimately and poverty. but it is absolutely clear that given the level of social security benefit tied to your earnings level throughout your career, if they were low your benefit will be low. we have many people working with total income under the poverty level. >> we do. it's tragic so many are women. even more tragic that so many are women of color. what our proposal seeks to do is to address that and make sure we enhance payments to people from 10000 a day that are becoming eligible so it helps them in their retirement. so we have a system that reflect

the actual cost the elderly occurred so we also provide an opportunity, especially for those who retired that the new floor becomes 125% of poverty and that also so that we can give seniors a tax break. many continue to work after they have retired. in doing so, we tax people who are single, who make over $24000 in america couple over 32 by indexing the fund. we and ask that and so 11 million americans get a tax break. by providing tax break, by making sure nobody can retire into poverty and for the first time making social security solvent in the 75 year requirement is this bill we asked you to review do that?

>> it does. i'm happy to tell you with the nature of the changes we have in the report, we expect your bills will be successful. >> i see my time is up. i'll be back for a second round. >> thank you mr. chairman. thank you for your testimony today. i applaud you for holding this hearing and i look forward to working with you. we have responsibility to preserve social security for retirees and those who are approaching retirement for children and grandchildren so

they can count on social security. williams of americans rely on this to cover their expenses in retirement. seniors and retirees have worked hard so they can enjoy their retirement. we must honor the promises we have made to those who have done so much to build the economy and whoever the peaceful retirement. i read the report, i find it as troubling as the rest of the committee does. i'm sure the rest of the folks that we represent. i'm wondering, there is good news in this report as well. i know you covered it. but in the reported showed the disability insurance trust gain for additional years of solvency when compared to last year's projections. it is nice to see some good news in this in the trustees report. i'd like to get your perspective

on this particularly as we are growing and unemployment is is at a record low. historically speaking, and i've had speculation as to why this is, to applications for disability insurance go up when it's more difficult to find a job? >> they do. historically when we have high unemployment of a weak economy we have an increase in applications. not only do we have an increase, but the percentage of the applications found drop. so, the increase in the number of people receiving benefits does not drive us much as you would expect. the counterpart is true when the economy gets strong and jobs are more plentiful we tend to see fewer applications coming in. we anticipated that in the

recovery, what is fascinating is the drop in the applications have been more than anticipated even given the strength of the economy. >> thank you. after last year, the tax cuts our economy continues to grow. americans are taking home higher paychecks. they estimated that the tax will create 900,000 jobs for the next decade. that's great news for the country. seems to me getting more -- can you describe the significance of all the new jobs relative to the social security solvency in their bottom line. >> new job similar people are

critical because we are system all the benefits scheduled to be paid out derived from payroll tax contributions made by the workers of the day. the jobs are critical. you are correct that cb was projecting a higher number of workers across the end of the next ten year time. there projecting about 400,000 more people employed in 2027 and was projected in last year's. to put that in a proper frame of reference. cbo is projecting about a 5% increase in total employment in the trustees are doing --%. were glad to see they have up there expectation for workers. the trustees are at a higher growth rate of employment.

>> will cause a deviation? >> we had a hearing a while back comparing the assumptions and projections. the trustees are a bit more optimistic view on the recovery over the next few years and into the long-term than cbo and some other entities. >> thank you. i yield back. >> mr. gross, the tax bill incentivize i'm sorry, mr. gosse they incentivize the pastor businesses that moved the top tax rate unencumbered from 39.6 to 15%. what impact will this have on the solvency of the social security trust fund?

>> there were a number of factors in the recent tax bill, the trustees have not taken into account the macro or dynamic scoring. the other factors built in which is the payroll tax changes, the pass-through and the removal of the mandates on balance have relatively small net effect. some would create more revenue. some less. in some over the long term that this direct first-order would be negligible. >> you have different information than i have. that's why i asked the question. pastor businesses, the growth of those businesses now with the incentives that i just mentioned

would contribute to the erosion of the payroll, would it not? >> i believe that is true. >> the information we built in. >> the information you built into it can you explain why the social security trust fund has reserves? >> we have reserves largely because in the law trust funds do not have the ability, capacity or legal right to borrow, therefore it's essential to pay benefits from one month to the next that we have some reserves to draw on just in case we ever have another recession or any other reason for which we have more money paid out then we receive. we need to have a cushion.

the desires have one years worth of output as a reserve. the reason is in case things turned bad we will have time to come to talk to, tell you about it work out appropriate legislation. >> has social security ever failed to pay anyone's earned benefit ever? >> no. >> let me say this. i like what larson put together in the social security 2100 act. nineteen oh two it would solve the very problem that trustees approach in which we will be trying to figure out hopefully with good hearings down the road. it would raise benefits. i cannot support any program that would cut benefits in order

to solve the problem. from the get go, that's run coming from. your report shows social security will use its current income tax and revenues plus interest earnings on its reserves in the reserves itself to pay benefits for the next 16 years. the report notes that social security will have to start drawing on the $2.9 trillion in reserves. that's to supplement current income and to pay benefits. i do not think this is a cause for long. rather, this is congress' intent is part of the last major set of changes, financial changes that were made to social security in 1983. drawing on the reserves as it is

periodic throughout history. so, we should heed the advice of the trustees and look at policy options that would reduce or eliminate the long-term financing as soon as possible. to that end, the threshold to which social security phases out is too low. it is mostly funded by attacks of income from labor, a hard days work. but not other forms of income, like the passive income from investment. i intend and many others intend to do something about it. i yield back. >> thank you for you questions. it is good to see you back. we appreciate your expertise and leadership.

on a very critical issue. i represent southwest florida, and pillsbury county. 229,000 people are in the program. i know how important it is to protect the viability of this long-term. i heard one third of seniors who are withdrawing -- this is critical. let me ask you, from a political standpoint we have to find a way politically to resolve the viability of the programs in the later. is that your sense of it? >> i think we agree with that. enacting something to make changes it would give and allow

you more options to consider and allow you to face in the changes more gradually. >> we've talked earlier, you said last time we made a change we had her back against the wall. unfortunately that happens a lot. where is the timeframe? it seems like the sooner we deal with it and get something on a bipartisan basis, the better it will be, less onerous it will be, some of those tweaks and adjustments they made made a big difference. is that your thought as well? >> absolutely. we must go forward in working with all of you. and to develop plans if there's more plans to come we're ready. >> i don't know if i read this, but this is putting together in

the mid- 30s or so social security is a great program, probably the best for medicare. someone said that if you don't die early, so to speak, if you reach 65 the average person in america lives to be 85, is that true? it seems to me my mother-in-law was just in town, she's 99, lives on her own. she has a sister, just from the actual numbers how do you look at this? >> i think 20 years is close, it's a little longer for women than men. and for our projections, we do this with great care. we make changes carefully and only incrementally. many people access and were arguing that changes in death rates that we were projecting

were not improving fast enough. since 2009, mortality rates overall have been improving very slowly. >> i want to ask you a few more quick questions. there projecting -- might be a size 2.7, is there any sense that could go higher? >> what we have is where expecting a 2.4, we think that is likely to be pretty good. we'll have to pay attention. >> and then the other thought, i hear ten or 12000 people turn 65 every day. in terms of the funding of it, with the growth with a 4% growth you mentioned the other day, that grows, lower unemployment, what impact does that have in

terms of taken the trust fund more viable going forward? >> as mentioned earlier, the rate of growth is nearly two and half% in real terms over the next decade. that's faster than any of the private forecasters definitely that contributes for the ability for the trust fund. >> that's why am surprised to hear when they spend more than what they taken. i like to hear with the growth and new jobs that would offset that. >> the date has changed over time. the economic cycles, and go.

i think as mentioned before the fact that we're at the point of spending more. >> my time is up, you'll back. >> thank you. i just want to summit for the record the statistics on women and almost 49% of all elderly unmarried females receiving benefits reliance social security for 90% of their income - think you. >> mr. kelly, you are recogniz recognized. >> looking through this, think sometimes we forget where the revenue for social security comes from. it's from wage taxes or federal insurance contribution. becomes a math problem for consideration. when i'm looking at the totals

of dollars, payroll tax make up 87% of the revenue that comes into social security. another 3% from taxes on benefits. another 9% on interest on that money. when social security was started, if you look at mortality rate, retirement versus the end of benefits being paid to someone, what was the average mortality rate at that time we were looking at that window? do we know what that is? >> for people -- it 79 years old now. >> you're talking about life expectancy sumac at the very beginning of the program life expectancy was much less, probably less than 65. part of that his cousin fit mortality was so high. we usually focus on life expectancy at 65.

>> there has been a decrease in white males, especially. there's an increase in the death rate and people are saying that's due to drug overdose, suicide. a lot of that comes because when we have an economy that so slow or something about the roles we play in life for men and women. men have this idea that there the husband, father, provider. when that's not available it puts tremendous weight on who they are and they become fragile. the reason i bring that up, is if the real revenue comes from participation in the labor for force, with a tax cut and jobs bill were see more people get back to work the more people contributing that 6.2% of the person getting paid.

is 12..4%, the more people we get into it, the more revenue we get. theoretically, if we have people, the people are dying that an earlier age, that equation bounces back and forth. i know you can't tell me right now, i'd like to see going forward where were going. i think social security is a wonderful program. unfortunately people think it comes from the government. comes from people working and if you're self-employed as i am, you paid both sides of that. you pay 12.4% of everything. talk about numbers and going forward, how do we continue these benefits when people reach their retirement age. for some people this is their

sole income. i appreciate it if you can, there's an article i would like to submit for the record. >> this is in the trustees it's a marvelous read for people just to look at just to get a more realistic understanding of what social security is out works, who funds it, going forward how does that work? i think were going that economy fast now. it's happening at a fast pace a net revenues going to come in to help pay these benefits.

i yield back this regards, i have looked at your report. i look at it is good news. the part about the survivor benefit is not unexpected. statistics jested by year. the disability is better than we thought. we thought it was going to expire. >> in 2028. >> a few years ago we are expected -- >> the recent change of former years of disability wasn't at the result of legislation,. >> it's just the experience were seen in the program. >> i'm looking at a graph of the disability applications of the

number of people in payment status. it looks like the number of people, the applications peaked at about 2010. but those payments have been dropping. >> you had 9 million people in 2014, and now you're around 8,000,005, if that continues to drop, the disability program will be able to continue out further and further, correct? >> right. >> a lot of this is driven by the labor participation rate. it looks to me that the labor participation rate peaked at about year 2002. and then it dropped a little bit, in 2008 until about 2014 and then it leveled off. it's starting to get better now, isn't it?

>> it is. employment levels are rising even before the labor force. >> so that when just help the disability, that would help them pay their claims. it also helps the survivor portion as well. >> in the retirement and medicare portion. >> you assumed to 2.4% growth in gdp over ten years? >> 2.43. that is in real terms. >> and cbo is assuming 3.2 the issue i think. >> on average 1.95%. >> from the time i got to congress i think this cbo is projected at 2.9.

i think i got down to 1.9 a few years ago. since he been elected which way are they going down? >> there been coming up in the near term. >> not just in the near term, their projections over ten years have been increasing as well. >> they have. >> have the economic numbers, those are projections let's talk about experience. the economic numbers in the last few years, have they been better or worse than what has been projected? >> i think are projections have been about on target for the amount of growth we have been seeing. >> i think cbo continues to rise dramatically.

this projection that you did, and did not really take the tax reform bill into account, did it? >> in terms of direct effects, does not have a boosting needs. but it is substantially faster as it is this cbo. >> but you didn't take into account any increase. >> we did not put additional growth on top of what we have. >> do you think the macro effects are stimulative? >> indeed. >> if that's not taken into account, then your projections could be on the low side. if they are, that would extend the life of both disability and retirement programs. >> that could well be. >> will see it in the next report. we need to look at the great slowdown we have in productivity feeling like they should take more out of the future growth.

>> if we can make further progress in terms of immigration, infrastructure, trade agreements, all of those things matter, don't they. >> immigration is a huge factor. >> thank you. >> thank you mr. chairman. i'm honored to be part of the subcommittee. this is part of my first hearing. thank you for being here today. i was hoping you could walk me through your process of creating the report and the average time it takes to do that. >> and working with our trustees and their teens, we will start working in the next two weeks. we formulate our assumptions to the trustees in october through december of this year. they will be looked at an agreed-upon, then takes a fair

amount of time for us to work through the assumptions to develop projections for the country and then all aspects of the social security beneficiaries benefit level. our target date is always april 1. we are required to target by statute we will do everything we can to get there. we have not met that every year. not recently. >> clearly, this data that we get each year is important. from the oversight perspective building off the gao to bring more transparency to the process, and interested in your thoughts as to why this delay persists and how we can change that.

>> we do have a board of trustees which includes four ex officio members of the cabinet. they have a bit more complicated process then does the budget office who works all under themselves. we need to work with secretary labor, hhs and social security to work through that. >> things to congress, you have required for many years and actuarial opinion at the end of the report. if we are instructed to put something that's inappropriate we will tell you. >> and beyond that, are there any other barriers you see that relate to this delay? >> from time to time as you can

imagine, getting a group of people together at a particular point in time and place can be challenging. one thing that has contributed has been getting the members of the board together. we have quorum requirements, and for the year in which we have a report we have the actual members of the board of trustees there. sometimes there are delays. >> i yield back. >> thank you. >> this is a moment that i find joyful. many of the conversations we've had i find fascinating. as i look at the report of the last few years you are

disciplined in i don't say slow walk, but you create a perpetual horizon. were in this goldilocks economy right now. some of that is not in the report because to reduce something here to screw it up? also demographically he seemed to smooth out some of the chart. is my simplified explanation correct? >> we try, our sense is that for you who will be making the decision, if we were to go up and down in the economy give you dramatically different numbers, that would not be good. >> in that same framework

particularly as were working on policy, there's things happening in our society that have long-term effects almost immediately. you seen a recent birth rate calculation. we are down to 1.76. that number seems to have fallen and we have to believe that is our new normal. can you give me about 30 seconds the birthrate, because my two and a half-year-old is an annuity to pay my social security. we wanted to color that but they were opposed. but in my being fair? >> you are, we are a pay-as-you-go situation. it is the worker of the day that will pay. when we shift in the baby-boom,

where people on average had three another having to, maybe fewer, then where we used have three kids in the economy pain and for every pair of elders, in the future we'll have two or less. >> that's about a-year-old but i'm looking at 11 years from workers for everyone retiree. >> by about 2035 we'll be there. that's with the birthrates that occurred in the is. this has been for same. >> so for some of us we get in this economic area but we have to deal with other realities. immigration is we're discussing has affected. is it talent base, does it lean younger or older?

>> our ability to focus on this committee to bring you a series of these, as were working on the stabilization registration of the future, the chairman and ranking member all have bills, i have a fixation of taken apart the bills and thinking 15 years from now birthrates go up and you could do certain adjustmen adjustments, we have a blended payroll tax revenue because gdp is not always linked to payroll tax. is something that can expand the salary, wages and other things are getting decoupled. is there a rational way if we wanted to design a future

stability that you cure alzheimer's tomorrow and then we live longer that's a huge stress on the system. should we have a discussion that if were going to build that legislation makes it so we never see that again. how do you design slow o on rams to say we might have to move the retirement age up. to have the capacity for us to bring you those ideas? >> we would welcome all your ideas. have about 130 or hundred 50 different provisions for people in the room today. we have possibilities. in terms of raising the retirement age there are several different mechanisms for

indexing retirement age. thank you for mentioning birthrates which is the much stronger driver on the cost of the program. we don't really have a direct mechanism for changing the program. >> my little girl isn't going to be in the labor force for years. >> thank you. the last question was for all of us to think about. >> thank you. the news from the trustees report is clear, time is [inaudible] our side when it comes to fixing social security. as i've said before, i believe any solvency plan should meet the following principles. first, it ought to fix social security permanently, not just push out the trust fund for a few years.

it ought to modernize social security to reflect the days workers and family. it ought to reward hard work and it should protect the most formidable, and finally it should improve retirement security. with those things in mind, i think we can fix it. it's up to congress to make the tough choices to make sure social security is here in the future just like it is for seniors and those with disabilities today. the american people expect and deserve nothing less. take a tour witness, thank you turn members are being here. with that, the subcommittee stands adjourned.

>> found one. [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation]

[inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] >> we discussed the physical health of the social security and medicare trust fund with two former trustees. this program