Wednesday, April 12, 2023

Countdown to Cuts: Social Security has Enough Money in Trust Fund for Only 10 More Years; SS Trust Fund on Track to Run Out in 2033; Will Lawmakers Actually Let Social Security Cuts Happen?

AP Photo/Jenny Kane, File
Countdown to cuts: Social Security has enough money in trust fund for only 10 more years:
The Social Security Administration said Friday that its main trust fund will run out of money in 2033, leaving the program with no reserves and forcing an immediate 23% cut in benefits unless Congress acts to shore up the program before then.
That deadline is a year earlier than the previous projection last spring and reflects the slightly worsening overall fiscal health of the federal government.
Social Security’s trustees said they had to cut their economic projections for the next decade, based on new data about high inflation and total economic output.
Even with that grim economic news, another key trust fund — Medicare‘s Hospital Insurance program, also known as Medicare Part A — improved by three years, and will now be solvent through 2031, the trustees said.
After that point, Medicare beneficiaries would see an 11% cut.
Both programs now see their trust funds dry up within the 10-year budget window that Congress and the White House operate on. That means the insolvency problem is now a real issue for budgeters, who must either grapple with the shortfall or acknowledge that benefit cuts will happen.
President Biden has accused Republicans of secretly plotting cuts to Social Security. But the budget he delivered to Congress earlier in March did not include a fix for the looming shortfall. --->READ MORE HERE
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Social Security trust fund on track to run out in 2033:
Reserves for Social Security’s largest trust fund are on track to run out as soon as 2033, a board of trustees of the program’s accounts said in a report on Friday.
The estimate is one year sooner than previously projected for the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays out Social Security benefits to retirees, in the trustees’ report from last year. If the reserves are depleted, the report projected income for the account would only cover 77 percent of scheduled benefits.
By contrast, the board estimated the program’s smaller Disability Insurance (DI) Trust Fund would not become depleted for at least 75 years.
While both funds are separate, the accounts have usually been considered as a combined fund when discussing the program’s solvency. Lawmakers have also allowed inter-fund borrowing between accounts to temporarily extend solvency in the past.
The retirement and disability trust funds together could cover 100 percent of total scheduled benefits until 2034, according to the report, one year sooner than the board previously reported.
If both funds are depleted before Congress can act to replenish them, the government would only be able to cover 80 percent of scheduled benefits to retirees and disabled beneficiaries. --->READ MORE HERE
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