FORMULA:

Annually, The Congressional Budget Office (the “CBO”) will calculate and publish the ("SSAPR") by October 15.

The formula for the annual SSAPR is as follows: 

Projected Total Payout Requirements for the Succeeding Year for

Social Security Insurance

Plus previous year's IPANS* including interest or

Minus previous year's Surplus and

Minus Optional U.S. Government Contribution

         ---------------------------------------------------------------------------------------------- = SSAPR

Projected Total All Annual Income plus

Total Adjusted Compensation plus

Total Foreign Goods and Services

   *IPANS means Insurance Premium Anticipation Notes issued to compensate for collection/disbursement timing discrepancies 

    NOTE 1:  Surplus shall be invested in open-market U.S. Treasury Securities

    NOTE 2:  Optional U.S. Government Contribution shall mean a contribution to the Social Security Program that will, in the opinion and with the approval of Congress, inhibit an economic downturn

The required total amount paid for Old Age and Survivors Insurance and Disability Insurance in 2009 was $685.8 billion.  After the one-time permanent adjustment ($685.8*1.062) (assuming 2009 was the initial year of the new Proposed Program) and applying the resulting amount $728.3 billion and the total amount from the chart below to the above proposed formula the SSAPR for 2009 would  have been:

                                                            6.200%

(In thousands of dollars)  (Year 2009)

 ALL ANNUAL INCOME (US CITIZENS)

 Wages, Salary & Tips                                        $5,707,088,487

Taxable Interest                                                   168,001,234

Tax Exempt Interest                                               73,574,105

Dividends                                                            163,458,846

Alimony                                                                  8,821,395

Business Income                                                  309,248,331 (1)

Net Capital Gains                                                 263,099,445 (1)

Other Gains (Form 4797)                                        11,898,098 (1)

IRA Distributions                                                  179,131,646

Pensions & Annuities                                            822,742,643

Rental, Royalties (Schedule E)                              598,039,521 (1)

Farm Income                                                        11,615,884 (1)

Unemployment Compensation                                83,538,098

Social Security Benefits                                       457,087,273

Miscellaneous Income (Pub 525)                            71,028,964 (1)

Life Insurance                                                      59,000,000 (2)

Gifts & Bequests                                                 300,000,000 (3)

Gain from Sale of Home                                      100,000,000 (3)

Charitable Donations to Foreign Entities                  20,000,000 (3)

_____________________

_____________________

_____________________                   

                                                                      $9,407,373,970

 Notes:

Non-annotated amounts are taken from the IRS 2009 Statistics of Income (Estimated) (Forms 1040, 1040a and 1040EZ combined) (the latest reported as of 8/21/12)

(1) These amounts are adjusted from the published IRS estimates amounts due to the net reporting of certain amounts in the 2009 SOI Report (i.e. Taxpayer A profit combined with Taxpayer B loss)

(2) Source:  American Council of Life Insurers benefits paid 2009

(3) These amounts are estimates as they are not currently reported

ADJUSTED COMPENSATION

  Paid by American Employers (Estimated)       $     80,000,000

FOREIGN GOODS AND SERVICES

 US Census 3 year average

 2008-2010 ($2,257,292,000):                         $2,257,292,000

                                                                $11,744,665,970

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