On Tuesday, the Social Security and Medicare Trustees released an annual report that details the program’s long-term funding shortfall and how benefits will have to be cut by 2034 unless Congress acts. The report attributes the program’s issues to the COVID-19 pandemic and the economic recession.
Data from the Census Bureau shows that American adults are expected to outnumber individuals under the age of eighteen by 2034.
“If this report does not trigger a pretty serious and swift discussion on Capitol Hill among lawmakers about what needs to be done to put Social Security back on a financially sustainable track, it’s really hard for me to imagine what could,” Charles Blahous, former Trustee for Social Security and Medicare, said.
According to the report, Social Security would only be able to pay 78% of benefits to retirees and individuals with disabilities.
“The problem is enormous,” Blahous said. “If and when we do make a change to the benefit structure, lawmakers will want to phase it in more gradually.”
The Trustees are calling on lawmakers to address the funding problem.
“We elect members of Congress to solve these problems and if they don’t solve them, they ought to be fired and replaced with people that will,” former Congressman Reid Ribble said.
“The meaning of this is simply to tell Congress that we have shortfalls, that we will deplete our reserves if you don’t act, so act,” Stephen Goss, Chief of Social Security Administration, said.
Last year, 65 million people in the United States received Social Security benefits, and 63 million were insured through Medicare.
“By the time that trust fund depletion date rolls around, the game is long over,” Blahous said. “At that point, the size of the shortfall is so large and so vast that there really isn’t a realistic prospect of closing the shortfall.”
The Social Security program will only be able to pay 91% of fees related to hospital and nursing home costs for seniors. Prescription drug benefits will be “adequately financed into the indefinite future.”
“I am working with my colleagues in Congress and President Biden to strengthen Social Security,” Representative John Larson said. “We simply cannot afford to let politics get in the way of saving this program and securing this trust fund.”
President Joe Biden vowed to increase Social Security benefits by increasing payroll taxes for those earning $400,000 and more while campaigning.
“If I’m your president, we’re going to protect Social Security and Medicare. You have my word,” Biden said.
“Social Security is the bedrock of American retirement — giving countless Americans peace of mind and the ability to retire with dignity. I’ve been fighting to protect and expand the program throughout my career — and I’ll continue that fights as President,” the President tweeted last August.
“The Biden Plan will put the program on a path to long-term solvency by asking Americans with especially high wages to pay the same texas on those earnings that middle-class families pay. Preserve the nature of Social Security. Social Security is one of the nation’s great public policy successes, in large part due to the fact that participation in the program is shared across almost all workers. Provide a higher benefit for the oldest Americans. Implement a true minimum benefit for lifelong workers. Protect widows and widowers from steep cuts in benefits. Eliminate penalties for teachers and other public-sector workers,” the President’s campaign website said.
The President has proposed giving the Social Security Administration $14.2 billion for the upcoming 2022 fiscal year.
“The President’s budget will allow us to begin recovering from the coronavirus pandemic disruptions, building on the lessons we learned to become a stronger and more responsive agency,” Andrew Saul, former Social Security Administration Commissioner, said.
“President Biden’s budget proposal includes the necessary increases for the Social Security Administration [SSA] to help Americans access the benefits they’ve earned,” Larson said.
“Having strong Social Security and Medicare programs is essential in order to ensure a secure retirement for all Americans, especially for our most vulnerable populations,” Janet Yellen, Treasury Secretary, said in a statement on Tuesday. “The Biden-Harris Administration is committed to safeguarding these programs and ensuring they continue to deliver economic security and health care to older Americans.”
Nancy Altman, President of Social Security Works, says that she would not be surprised if there is a Social Security plan sometime this summer.