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Title 42, The Public Health and WelfareRelease 119-110

§910 Recommendations by Board of Trustees to Remedy Inadequate Balances in Social Security Trust Funds

Title 42 › CHAPTER 7 — SOCIAL SECURITY › SUBCHAPTER VII — ADMINISTRATION › § 910

Last updated Sep 22, 2026|Official source

Summary

The Board of Trustees for the Social Security and Medicare trust funds must quickly send a report to both Houses of Congress if it thinks any trust fund’s balance ratio could fall below 20% in any year. The report must recommend law changes to raise money or cut payments so the balance ratio stays at least 20%. The Board must take into account the economic reasons for the shortfall and how much time is needed to fix it fairly. The report must say exactly how much benefits would need to be cut, how much payroll taxes under sections 1401, 3101, or 3111 would need to be raised, or what combination of cuts and tax increases would reach the goal. Balance ratio means the fund’s balance at the start of the year (including taxes moved in under section 401(a) on day one and minus any outstanding loans under sections 401(l) or 1395i(j)) divided by the total estimated payments the fund will make that year for its purposes. It excludes loan interest and repayments, excludes transfers between these trust funds, and adjusts Railroad Retirement transfers by subtracting any transfers into the fund from that Account.

Full Legal Text

Title 42, §910

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Terms and conditions of recommendations
If the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund determines at any time that the balance ratio of any such Trust Fund for any calendar year may become less than 20 percent, the Board shall promptly submit to each House of the Congress a report setting forth its recommendations for statutory adjustments affecting the receipts and disbursements of such Trust Fund necessary to maintain the balance ratio of such Trust Fund at not less than 20 percent, with due regard to the economic conditions which created such inadequacy in the balance ratio and the amount of time necessary to alleviate such inadequacy in a prudent manner. The report shall set forth specifically the extent to which benefits would have to be reduced, taxes under section 1401, 3101, or 3111 of the Internal Revenue Code of 1986 would have to be increased, or a combination thereof, in order to obtain the objectives referred to in the preceding sentence.
(b)“Balance ratio” defined
For purposes of this section, the term “balance ratio” means, with respect to any calendar year in connection with any Trust Fund referred to in subsection (a), the ratio of— (1)
(2)the total amount which (for amounts which will be paid from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as estimated by the Commissioner, and for amounts which will be paid from the Federal Hospital Insurance Trust and the Federal Supplementary Medical Insurance Trust Fund, as estimated by the Secretary) will be paid from such Trust Fund during such calendar year for all purposes authorized by section 401, 1395i, or 1395t of this title (as applicable), other than payments of interest on, or repayments of, loans under section 401(l) or 1395i(j) of this title, but excluding any transfer payments between such Trust Fund and any other Trust Fund referred to in subsection (a) and reducing the amount of any transfers to the Railroad Retirement Account by the amount of any transfers into such Trust Fund from that Account.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Internal Revenue Code of 1986, referred to in subsec. (a), is classified generally to Title 26, Internal Revenue Code.

Amendments

1994—Subsec. (b)(2). Pub. L. 103–296 substituted “(for amounts which will be paid from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as estimated by the Commissioner, and for amounts which will be paid from the Federal Hospital Insurance Trust and the Federal Supplementary Medical Insurance Trust Fund, as estimated by the Secretary)” for “(as estimated by the Secretary)”. 1986—Subsec. (a). Pub. L. 99–514 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”. Subsec. (b)(1). Pub. L. 99–272 amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the balance in such Trust Fund, reduced by the outstanding amount of any loan (including interest thereon) theretofore made to such Trust Fund under section 401(l) or 1395i(j) of this title, as of the beginning of such year, to”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1994 AmendmentAmendment by Pub. L. 103–296 effective Mar. 31, 1995, see section 110(a) of Pub. L. 103–296, set out as a note under section 401 of this title.

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–272 effective on first day of month following April 1986, see section 12115 of Pub. L. 99–272, set out as a note under section 415 of this title.

Reference

Citations & Metadata

Citation

42 U.S.C. § 910

Title 42, The Public Health and Welfare

Last Updated

Sep 22, 2026

Release point: 119-110