2. Estimates as a Percentage of Gross Domestic ProductThis section contains long-range projections of the operations of the theoretical combined Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds and of the Hospital Insurance (HI) Trust Fund, expressed as a percentage of gross domestic product (GDP). While expressing fund operations as a percentage of taxable payroll is a very useful approach for assessing the financial status of the programs (see section IV.B.1), expressing them as a percentage of the total value of goods and services produced in the United States provides an additional perspective.Table VI.G4 shows non-interest income, total cost, and the resulting balance of the combined OASI and DI Trust Funds, of the HI Trust Fund, and of the combined OASI, DI, and HI Trust Funds, expressed as percentages of GDP on the basis of each of the three alternative sets of assumptions. Table VI.G4 also contains estimates of GDP. For OASDI, non-interest income consists of payroll tax contributions, proceeds from taxation of benefits, and reimbursements from the General Fund of the Treasury, if any. Cost consists of scheduled benefits, administrative expenses, financial interchange with the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries. For HI, non-interest income consists of payroll tax contributions (including contributions from railroad employment), up to an additional 0.9 percent tax on earned income for relatively high earners, proceeds from taxation of OASDI benefits, and reimbursements from the General Fund of the Treasury, if any. Cost consists of outlays (benefits and administrative expenses) for insured beneficiaries. The Trustees show income and cost estimates on a cash basis for the OASDI program and on an incurred basis for the HI program.The summarized long-range (75-year) balance as a percentage of GDP for the combined OASDI and HI programs varies among the three alternatives by a relatively large amount, from a positive balance of 0.62 percent under the low-cost assumptions to a deficit of 3.98 percent under the high-cost assumptions. The 25-year summarized balance varies by a smaller amount, from a positive balance of 0.39 percent to a deficit of 2.10 percent. Summarized rates are calculated on a present-value basis. They include the trust fund balances on January 1, 2015 and the cost of reaching a target trust fund level equal to 100 percent of the following year’s annual cost at the end of the period. (See section IV.B.4 for further explanation.)

Summarized rates:^{2}

Summarized rates are calculated on a present-value basis. They include the value of the trust funds on January 1, 2015 and the cost of reaching a target trust fund level equal to 100 percent of annual cost at the end of the period.

To compare trust fund operations expressed as percentages of taxable payroll and those expressed as percentages of GDP, table VI.G5 displays ratios of OASDI taxable payroll to GDP. HI taxable payroll is about 25 percent larger than the OASDI taxable payroll throughout the long-range period; see section 1 of this appendix for a detailed description of the difference. The cost as a percentage of GDP is equal to the cost as a percentage of taxable payroll multiplied by the ratio of taxable payroll to GDP.

Projections of GDP reflect projected increases in U.S. employment, labor productivity, average hours worked, and the GDP deflator. Projections of taxable payroll reflect the components of growth in GDP along with assumed changes in the ratio of worker compensation to GDP, the ratio of earnings to worker compensation, the ratio of OASDI covered earnings to total earnings, and the ratio of taxable to total covered earnings.

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