NRPLUS MEMBER ARTICLE W ith the debt-ceiling deadline fast approaching, and policy-makers on both sides of the political aisle refusing to acknowledge the largest drivers of our ballooning federal deficits, the recent release of the Social Security trustees’ report throws another wrench into the works.

The report finds that the Social Security Trust Fund will be depleted in 2033, one year earlier than last year’s estimate. This projection is in line with a CBO estimate from December, which found that “the balance in the trust funds will decline to zero in 2033 and the Social Security Administration will no longer be able to pay full benefits when they are due.”

Apparently unfazed by the impending depletion of entitlement-program funds, President Biden has pledged to veto any plan that cuts Social Security. Meanwhile, some Republicans have even proposed drawing from the rapidly depleting Social Security Trust Fund to finance new proposed social programs.

Social Security makes regular monthly payments to insured workers and their families at retirement, death, or disability. In total, the program today provides benefit payments to around 51 million retired workers, 6 million survivors of deceased workers, and 9 million disabled workers.

While imperfect, Social Security benefits serve as a critical means of income protection for many seniors. Indeed, statistics show that one out of four Americans aged 65 and above receives 90 percent of their income from Social Security. More than half of the population in this age group rely on it for at least 50 percent of their income.

The fact that so many seniors rely on Social Security shows just how far the program has deviated from its initial purpose of providing assistance to low-income elderly individuals. In 1955, for instance, there were nearly nine workers supporting each retired beneficiary. Today, this ratio has decreased to 2.8 workers per beneficiary.

And the math is only getting worse. According to the latest trustees’ report, this ratio is projected to fall to 2.3 workers per beneficiary by 2035, three years earlier than previously estimated. Social Security’s costs have exceeded its revenues from payroll taxes since 2010, but as this workers-to-beneficiaries ratio continues to shrink, it will widen the gap. Essentially, that means Social Security is only becoming more economically unsustainable over time. Social Security’s Old-Age and Survivors Insurance Trust Fund, which is currently valued at $2.7 trillion, is decreasing rapidly too. It is projected to be exhausted by 2033.

All that to say, if policy-makers continue the current policy of doing nothing, Social Security beneficiaries will necessarily face significant cuts to their benefits starting in ten years.

Policy-makers have two options to avoid this fate and maintain Social Security’s solvency: Cut benefits or raise payroll taxes. They could also attempt a combination of these two approaches. Regardless of what they choose, however, the longer that policy-makers wait to make these changes, the larger those tax hikes and benefit cuts will have to be to fill the trust-fund deficit.

Specifically, to ensure that Social Security remains fully solvent for the next 75 years, payroll taxes today would have to be raised from 12.6 to 15.84 percent, according to the trustees’ report. If spending reductions are the preferred policy prescription, then benefits would have to be reduced by 21.3 percent immediately. But if lawmakers continue to defer action until funds become depleted in a decade, then payroll taxes would have to be raised to an eye-watering 16.55 percent, or scheduled benefits would have to be cut by 25.2 percent.

Luckily, there are policy recommendations that could help decrease expenses and improve economic stability for retirees. I have written about these in previous articles, and they include raising the retirement age to at least 68, indexing retirement age to life expectancy, and adopting chained Consumer Prince Index as the preferred metric for measuring annual cost-of-living adjustments (COLA).

If policy-makers are serious about supporting the most disadvantaged and safeguarding the enduring retirement assistance that the Social Security system provides, then they must unite and pursue bipartisan remedies for its long-term viability. Excluding Social Security reform from budget negotiations is irresponsible and unsustainable.