Updated predictions regarding three of the major Social Security funds cast a grim shadow on the future ahead for the U.S. population.
According to the latest projections from the Congressional Budget Office, two of the funds will be drained by 2033 while another major fund will be gone by 2048.
The Old-Age and Survivors Insurance Trust Fund are the two funds most in danger of being depleted while the CBO says the Disability Insurance Trust Fund is also of grave concern.
Social Security spending has been on the rise as more Americans hit retirement age and leave the workforce, solely relying on the fund’s benefits.
Updated predictions regarding three of the major Social Security funds cast a grim shadow on the future ahead for the U.S. population
According to the latest projections from the Congressional Budget Office , two of the funds will be drained by 2033 while another major fund will be gone by 2048
The news of the projections comes as Social Security recipients saw a major boost in their payments beginning in the new year.
Social Security hiked the benefits by 8.7 percent beginning in January to combat record inflation. The increase marks the highest cost of living surge since 1981.
The latest projections from the CBO found that the current gap between the outlays from the funds and the revenue received – if continued over the next ten years- will cause the fund to officially hit zero.
Should that happen, the Social Security Administration would be unable to pay out full retirement benefits to retirees as they become eligible.
Even if the Disability Insurance Trust Fund and the Old-Age and Survivors Insurance Trust Fund were to be combined, the fund would still run out by 2033.
The funds have additionally been stressed as they have been used to pay out payroll tax revenue to retirees.
The Old-Age and Survivors Insurance Trust Fund are the two funds most in danger of being depleted while the CBO says the Disability Insurance Trust Fund is also of grave concern
The news of the projections comes as Social Security recipients saw a major boost in their payments beginning in the new year
Social Security spending has been on the rise as more Americans hit retirement age and leave the workforce, solely relying on the fund’s benefits
The CBO also predicts the fund will continue to spend five percent of the United States’ GDP. The fund will eventually rise to seven percent by 2096.
The actuarial deficit is predicted to amount to 1.7 percent of GDP or 4.9 percent of taxable payroll over the next 75 years.
The forecast means the balance in the funds could be maintained if there was an immediate increase of nearly 5 percent increase on payroll taxes.
Social Security funds could also be maintained if there was a reduction in overall benefits for retirees.
If only examining what is available from tax revenues, the payments would be roughly 23 percent smaller than scheduled by 2024.
U.S. law could step in the way of reducing Social Security benefits, however, if that were to be proposed as an official solution.
As of now, there is no law on the books for reducing benefits to what is available based on payroll taxes.
The CBO also predicts the fund will continue spend five percent of the United States’ GDP. The fund will eventually rise to seven percent by 2096
The latest projections from the CBO found that the current gap between the outlays from the funds and the revenue received- if continued over the next ten years- will cause the fund to officially hit zero
The actuarial deficit is predicted to amount to 1.7 percent of GDP or 4.9 percent of taxable payroll over the next 75 years
This comes as lawmakers are currently sparring over how to address the debt ceiling, with some calling for cuts to Medicare and Social Security.
The U.S. officially hit the debt limit on Thursday, and the GOP is working on solutions on how to raise it before a potential default as soon as June.
Last week, former President Donald Trump made headlines for warning his fellow Republicans to not ‘destroy’ retirement benefits.
‘Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security to help pay for Joe Biden’s reckless spending spree, which is more reckless than anybody’s ever done or had in the history of our country,’ Trump said in a video message posted on social media.
‘Do not cut the benefits our seniors worked for 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 issued a warning to House Republicans, led by Kevin McCarthy (right), not to go after social entitlement programs as they look to force savings in the debt ceiling fight
Trump called out Biden’s agenda, calling the president’s spending ‘out of control.’
‘While we absolutely need to stop Biden’s out of control spending, the pain should be borne by Washington bureaucrats, not by 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 ‘left-wing gender programs from our military.’
‘The seniors are being absolutely destroyed in the last two years,’ Trump said.
A 2020 AARP poll of nearly 1,500 adults found that 96 percent said Social Security was either the most important government program or an important one compared to other government programs.
