Updated forecasts from three of the major Social Security funds cast a bleak shadow over the future of the US population.
According to the latest projections from the Congressional Budget Office, two of the funds will be depleted by 2033, while another large fund will be depleted by 2048.
The Old Age and Survivors’ Insurance Trusts are the two funds most at risk of depletion, while the CBO says the Disability Insurance Trust is also a major concern.
Social Security spending has increased as more Americans reach retirement age and leave the workforce, relying solely on the fund’s services.
Updated forecasts from three of the major Social Security funds cast a bleak shadow over the future of the US population
According to the latest projections from the Congressional Budget Office, two of the funds will be depleted by 2033, while another large fund will be depleted by 2048
News of the projections comes as Social Security beneficiaries saw a significant increase in their payments starting in the New Year.
Social Security increased benefits by 8.7 percent from January to combat record inflation. The rise marks the highest increase in the cost of living since 1981.
The CBO’s latest projections indicated that the current gap between the funds’ expenditures and the income received – if continued over the next decade – will see the fund officially reach zero.
Should this happen, the Social Security Administration would not be able to pay full pension benefits to retirees once they are eligible.
Even if the Disability Insurance Trust and Old Age and Survivors’ Insurance Trust were merged, the fund would still expire by 2033.
The funds were additionally burdened as they were used to pay out payroll tax receipts to retirees.
The Old Age and Survivors’ Insurance Trusts are the two funds most at risk of depletion, while the CBO says the Disability Insurance Trust is also a major concern
News of the projections comes as Social Security beneficiaries saw a significant increase in their payments starting in the New Year
Social Security spending has increased as more Americans reach retirement age and leave the workforce, relying solely on the fund’s services
The CBO also predicts the fund will continue to spend five percent of United States GDP. The fund will eventually grow to seven percent by 2096.
The actuarial deficit is projected to be 1.7 percent of GDP, or 4.9 percent of taxable payroll, over the next 75 years.
The forecast means that balance in the funds could be maintained if payroll taxes were increased by nearly 5 percent immediately.
Social security funds could be maintained even if overall benefits for retirees were cut.
Looking only at available tax revenue, payments through 2024 would be around 23 percent lower than planned.
However, US law could stand in the way of cutting Social Security benefits if it were proposed as an official solution.
There is currently no legislation on the books to reduce benefits to what is available on a payroll tax basis.
The CBO also predicts the fund will continue to spend five percent of United States GDP. The fund will eventually grow to seven percent by 2096
The CBO’s latest projections indicated that the current gap between the funds’ expenditures and the income received – if sustained over the next decade – will see the fund officially reach zero
The actuarial deficit is projected to be 1.7 percent of GDP, or 4.9 percent of taxable payroll, over the next 75 years
That’s because lawmakers are currently bickering over how to address the debt ceiling, with some calling for cuts to Medicare and Social Security.
The US officially hit its debt limit on Thursday, and the GOP is working on ways to raise it ahead of a potential default as early as June.
Last week, former President Donald Trump made headlines for warning his fellow Republicans against “destroying” the pension system.
“Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security to fund Joe Biden’s reckless spending spree, which is more reckless than anyone in our country’s history,” Trump said in a video that broke the news posted on social media.
“Don’t cut back on the benefits our seniors have worked and paid for their entire lives. Save Social Security. Don’t destroy it!’ Trump continued.
According to the CBO, Social Security accounted for 17 percent of federal spending in 2021.
Donald Trump warned House Republicans, led by Kevin McCarthy (right), against pursuing social entitlement programs as they seek to force austerity in the fight against the debt ceiling
Trump called out Biden’s agenda, calling the president’s spending “out of control.”
“While we absolutely need to stop Biden’s runaway spending, the pain should be borne by Washington bureaucrats, not hard-working American families and American seniors,” Trump said.
The former president says cuts should be made against “corrupt foreign countries” and “climate extremism” as well as “our military’s left-wing gender programs.”
“The seniors have been absolutely destroyed in the last two years,” Trump said.
A 2020 AARP survey of nearly 1,500 adults found that 96 percent said Social Security was either the most important government program or an important relative to other government programs.