The 2020 Trustees Report reveals, once again, that Social Security is not going ‘bankrupt’ or becoming ‘insolvent’ — as opponents often claim. If Congress takes no preventative action, the program’s trust fund will be depleted by 2035, after which it still would be able to pay 79% of benefits. However, this year’s report does not reflect any impact that the COVID-19 pandemic may have on Social Security.
“Social Security is strong. But its long-term fiscal health cannot be guaranteed if the White House and Congress continue to use the program’s financing structure for economic stimulus during the COVID-19 crisis. Those who would like to dismantle Social Security are using the pandemic to launch a stealth attack. A broad-based payroll tax cut, as the President has proposed, would interfere with Social Security’s traditional revenue stream while failing to deliver effective or equitable stimulus. Meanwhile, Social Security already provides more than $1.6 trillion in annual economic stimulus as seniors spend their benefits for essential goods and services in their communities. Now is not the time – in fact, it is never the time – to tamper with a program that more than 40% of retirees rely upon for all of their income.” – Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare
The Trustees estimate that the Social Security cost-of-living adjustment (COLA) for 2021 will be 2.3%. However, that projection does not reflect the impact of the pandemic on inflation, and the actual COLA for next year could be lower.
“We do not know the extent of the pandemic’s impact on Social Security, but we do know that seniors need a boost in their benefits. Let’s strengthen the program now by eliminating the payroll tax wage cap and demanding the wealthy pay their fair share. That way, we can expand benefits and adopt a more accurate cost-of-living inflation formula for seniors.” – Max Richtman
As for Medicare, the program’s financial future is relatively unchanged from last year’s report, but the impact of the pandemic is not reflected. The Medicare Part A Trust Fund will become exhausted by 2026, after which the program still could pay 90% of benefits – if Congress does nothing to strengthen Medicare’s finances.
The Trustees estimate that the Medicare Part B premium will rise to $153.30 per month in 2021, an $8.70 increase over last year’s.
Lawmakers can take action to cut beneficiaries’ out of pocket costs and boost Medicare’s fiscal health by passing H.R. 3, The Lower Drug Costs Now Act — which would save the program some $400 billion in projected prescription drug costs by allowing the government to negotiate prices directly with Big Pharma.
“During this time of crisis, Americans are turning to Social Security and Medicare now more than ever. Let’s work to strengthen these programs that have been the bedrock of America’s middle and working classes, and resist proposals by those determined to tear them down.” – Max Richtman
Read our Analysis of the 2020 Social Security Trustees Report
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