Social Security trust funds are projected to become insolvent over the next decade if lawmakers don’t take legislative action to preserve the health insurance program, according to the most recent report by the Social Security Board of Trustees.
If no action is taken, Social Security is set to become depleted by 2033 — one year earlier than previous estimates, according to the report. The most recent projections come as lawmakers remain split on how to fund the welfare program, and negotiations remain stalled over next year’s budget.
MEDICARE TRUST FUND TO BE EXHAUSTED IN 2031, TRUSTEES PROJECT
“Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls,” the board wrote. “We urge Congress to consider such options for both Medicare and Social Security, like the proposal for Medicare in the President’s FY24 Budget. With each year that lawmakers do not act, the public has less time to prepare for the changes.”
The Board of Trustees released its projections for several of Social Security’s trust funds over the next decade, predicting all scheduled benefit payments will become insolvent by 2033. Social Security consists of four trust funds that are used to pay beneficiaries, including Old-Age and Survivors Insurance, Disability Insurance, Hospital Insurance, and Supplementary Medical Insurance.
OASI and DI operate independently from Social Security as a whole but are included in projections as the two funds are considered to be representative of the program’s status as a whole.
The most recent report predicts the Old-Age and Survivors Insurance fund will become depleted and unable to pay out full benefits starting in 2033, which is one year earlier than projected in last year’s report. The deficit for Social Security as a whole is set to be depleted by 2034, with only 80% of scheduled payments being made at that time.
The latest numbers have worsened from last year due to the Board of Trustees revising the expected levels of gross domestic product and labor productivity over the next 10 years. The board predicts those levels will decrease by 3% based on recent economic reports detailing inflation and U.S. economic output.
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The most recent report is likely to play into lawmakers’ debate over the debt ceiling and the budget for the next fiscal year as both Democrats and Republicans have vowed not to touch Social Security benefits as part of their proposed spending cuts.
Sens. Bill Cassidy (R-LA) and Angus King (I-ME) have formed a bipartisan group to address concerns with Social Security, framing the program’s looming insolvency as an “existential threat” and “complicated math challenge.” The pair have repeatedly requested a meeting with President Joe Biden to discuss funding the program, but the president has not yet scheduled such a discussion.