Administrative Expenses of the Social Security Program

.~I)MIr\‘lS’I’l~,Z’I‘IvE: E:XPEr\‘SII:S under the social security program have never been more than a small Ijercentage of the total contributionsd-3 l)ercent in most years. Such costs are met fronl four trust funds: old-age and survivors insurance (OASI), disability insurance (I)I) , IiosI)ital insurnnre (HI), and supplementary nledical insurance (SMI). ‘I‘lre ()X+1 program was initially financed by a c*oulbined employer-employee tax rate of 2 percent (1!)3749). This rate was increased to 3 percent in 1!)50 and has been increased periodically since tllat time. The rate decreased from 7.1 percent in 1967 to 6.65 percent in 1968, as a result of the 19CiS amendments to the Social Security hct, but it rose again in 196!)-to 7.45 percent-and is scheduled to increase to an l~ltimate rate of 9.05 percent in 1973. The I11 trust fund, established under the 1956 amendments to the Social Security Act, was init ially financed by a combined employer-eml)loyee tax rate of 0.50 percent of taxable payroll. ‘I’lle rate was increased to 0.70 percent under the 1965 amendments and to O.!G percent under the 1967 amendments. The 111 trust fund, established in 1965, had an initial combined employer-employee tax rate of (I.7 percent in 1966, with the rate scheduled to increase gradually to an ultimate rate of 1.6 percent in 1987. Under the 1967 amendments, the rates in the schedule were increased, and an 1lItimatc rate of 1.8 percent in 1987 was adopted. The S&II trust fund was also initiated under the 1905 amendments. Unlike coverage under the otller tliree programs, SMI coverage is voluntary, and monthly premiums are paid by those who elect coverage. These premiums are matched by the Federal (iovernment from the General Fund of the Treasury. The init in1 monthly premium for those covered under the program was $3. 111 -April 1968 it was increased to $4. In the three programs financed by payroll taxes, the self-employed person has always paid