Chapter 1: Social Security

Issues: Social Security

Social Security is a self-financed program that provides monthly cash benefits to retired or disabled workers and their family members, and to the family members of deceased workers. The program is authorized under Title II of the Social Security Act and administered by the Social Security Administration (SSA). (The SSA also administers the Supplemental Security Income (SSI) program authorized under Title XVI of the Social Security Act. See Chapter 3 of the Green Book for a discussion of SSI, a means-tested program for the aged, blind, or disabled.) As of August 2018, there were 62.6 million Social Security beneficiaries. Of those, 46.4 million were retired workers and their family members, 10.2 million were disabled workers and family members, and 5.9 million were the survivors of deceased workers.[1]

Social Security is financed primarily by payroll taxes paid by covered workers and their employers. In 2017, an estimated 172.8 million workers were covered by Social Security.[2] Employees and employers each pay 6.2% of covered earnings up to an annual limit ($128,400 in 2018); self-employed individuals pay 12.4% of net self-employment income up to an annual limit ($128,400 in 2018).[3] Self-employed persons may deduct one-half of their Social Security payroll taxes for federal income tax purposes.[4] Social Security is also credited with tax revenues from the federal income taxes paid by some beneficiaries on a portion of their benefits, reimbursements from the general fund of the U.S. Treasury that are made for a variety of purposes, and interest earned on Social Security trust funds’ assets. 

Social Security income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund.[5] As the Managing Trustee of the Social Security trust funds, the Secretary of the Treasury is required by law to invest Social Security revenues in interest-bearing federal government securities (special issues) held by the trust funds.[6] The revenues exchanged for the federal government securities are deposited into the general fund of the U.S. Treasury and are indistinguishable from revenues in the general fund that come from other sources. Funds needed to pay Social Security benefits and administrative expenses come from the redemption or sale of federal government securities held by the trust funds.

In 2017, the Social Security trust funds had a total income of $996.6 billion, total expenditures of $952.5 billion, and accumulated holdings (asset reserves) of $2.9 trillion.[7] Because the assets held by the trust funds are federal government securities, the trust fund balance ($2.9 trillion at the end of 2017) represents the amount of money owed to the Social Security trust funds by the general fund of the U.S. Treasury.

Congressional Research Service (CRS) Reports

For more programmatic information, please see reports published by the Congressional Research Service.

CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.

Legislative History

The following provides a legislative history for Social Security from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.

Social Security Number Fraud Prevention Act of 2017 (P.L. 115-59)

The Social Security Number Fraud Prevention Act of 2017 generally prohibits agencies of the federal government from mailing documents containing full Social Security numbers (SSNs) by September 15, 2022. The law also requires agencies to provide annual reports to Congress that include a listing of documents the agency sent in the previous year containing full SSNs and an update on the agency’s progress in implementing the law.

Strengthening Protections for Social Security Beneficiaries Act of 2018 (P.L. 115-165)

The Strengthening Protections for Social Security Beneficiaries Act of 2018 made a number of changes to the SSA’s representative payee program, including:

  • Requiring the SSA to make annual grants to state Protection and Advocacy systems to conduct all performance and monitoring reviews of representative payees on behalf of the SSA.
  • Waiving the requirement to file an annual accounting form for representative payees who are (1) parents or legal guardians living with their child or adult child who has a disability, or (2) spouses.
  • Requiring the SSA to identify represented minor beneficiaries in state foster care and re-determine the appropriateness of their representative payee in certain instances.
  • Directing the SSA to study ways of improving coordination with state Adult Protective Services programs and of sharing information with state guardianship courts.
  • Clarifying that in situations where the minor beneficiary is in foster care and the state is the representative payee, the state is liable for the repayment of any overpayment incurred.
  • Allowing adult beneficiaries to designate one or more individuals to serve as their representative payee should the SSA determine that the individual needs a payee in the future. The SSA must still assess the designee’s suitability to serve as a payee prior to appointment.
  • Prohibiting individuals convicted of certain felonies from serving as a representative payee as well as prohibiting beneficiaries with their own representative payee from serving as the representative payee of others.
  • Requiring the SSA to reassess its order of preference for selecting representative payees.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (P.L. 115-174)

Section 215 of the Economic Growth, Regulatory Relief, and Consumer Protection Act requires the SSA to develop a database, or modify an existing database, to allow certain financial institutions to verify consumers’ personal information against the SSA’s records with the consumer’s electronic consent. All costs of the development or modification and operation of the database are funded through user fees.

Tribal Social Security Fairness Act of 2018 (P.L. 115-243)

The Tribal Social Security Fairness Act of 2018 allows Tribal Councils to voluntarily enter into Social Security coverage agreements with the SSA. The bill also allows Tribal Council members to receive Social Security credit for Social Security taxes paid prior to establishment of a coverage agreement as long as these contributions were made timely and not subsequently refunded.


This page was prepared November 2018 for the 2018 version of the House Ways and Means Committee Green Book.

[1] Social Security Administration (SSA), Monthly Statistical Snapshot, August 2018, Table 2. The total does not equal the sum of the rounded components.

[2] Currently, 94% of workers in paid employment or self-employment are covered by Social Security. Social Security Administration, 2018 Social Security/SSI/Medicare Information, February 2018.

[3] The annual limit on covered wages and net self-employment income subject to the Social Security payroll tax (the taxable wage base) is adjusted annually based on average wage growth, if a Social Security cost-of-living adjustment (COLA) is payable.

[4] Self-employed individuals are required to pay Social Security payroll taxes if they have annual net earnings of $400 or more. Only 92.35% of net self-employment income (up to the annual limit) is taxable.

[5] The OASI and DI trust funds are referred to on a combined basis as the Social Security trust funds.

[6] Social Security Act, Title II, §201(d) [42 U.S.C. §401(d)].

[7] In 2017, 87.7% of Social Security’s total income was from dedicated payroll taxes, 8.5% was from interest earned on trust fund assets, 3.8% was from federal income taxes paid on Social Security benefits, and the remainder was from general fund reimbursements to the trust funds for a variety of purposes. Of total expenditures, 98.8% was for benefit payments; the remainder was for administrative expenses and transfers to the Railroad Retirement program. See Social Security Administration, Office of the Chief Actuary, Financial Data For A Selected Time Period.