The Good News/Bad News About Social Security Solvency
Things are looking up — slightly — for the millions of Americans receiving Social Security benefits. According to an article by CNBC, the newly released Social Security Administration (SSA) trustee’s report found that the trust funds used to pay benefits are now projected to run out in 2035 (one year later than previously projected) and will be able to pay out 83 percent of benefits. That’s the good news.
Last year, the trustees projected Social Security’s funds would last through 2034 when 80 percent of benefits would be payable.
The article explains, “The trustees credited the slightly improved outlook to more people contributing to the program amid a strong economy, low unemployment, and higher job and wage growth.”
Retirees Still at Risk
Now here’s the bad news.
While the new SSA trustee’s report sounds promising, it’s important to note that retirees will likely not benefit. That’s because their new findings are for the entire Social Security program.
The Old-Age and Survivors Insurance Trust Fund — the fund that pays retirees’ benefits — is projected to last until 2033. That’s unchanged from last year. At that time, 79 percent of those scheduled benefits may be payable.
Congress Needs to Act!
Experts and senior advocates see the trustee’s report as a wake-up call to Congress, saying now is the time to act and prevent the looming shortfall.
The vice chair of the congressional Joint Economic Committee, Rep. David Schweikert, went as far as to say, “This isn’t a report where everything is fine and wonderful. It almost shows you how much we’re living on a razor’s edge.”
Fortunately, some lawmakers are already working on possible solvency solutions.
The Seniors Trust believes the best way to address Social Security’s funding shortfalls is to enact the Social Security Expansion Act. It will extend the solvency of the Social Security trust fund through 2096, by requiring the wealthiest Americans to pay their fair share. This legislation would lift the income tax cap, which currently stands at $160,200, and subject all income above $250,000 to additional Social Security Payroll tax. Under this bill, more than 93 percent of households would not see their taxes go up by one penny.
This landmark piece of legislation would also increase benefits by about $200 per month and establish a fairer cost-of-living adjustment (COLA).
Show Your Support
If you support The Seniors Trust’s mission to buttress the long-term solvency of Social Security by expanding benefits for seniors — not cutting them — please add your name to our petition to Congress.
