Social Security’s trust fund received a one-year reprieve in the 2022 Social Security Trustees report, released late Thursday afternoon. The Trustees project that the combined disability and retirement trust fund will become depleted in 2035 – one year later than predicted last time – if Congress doesn’t take preventative action. When the trust fund becomes insolvent, the Trustees say, Social Security will only be able to pay 80% of scheduled benefits. That would mean a massive benefit cut for everyone who collects Social Security.
While the National Committee to Preserve Social Security and Medicare is relieved that the trust fund is projected to remain solvent for one additional year absent any action by lawmakers, President and CEO Max Richtman said in a press statement that Congress must act now to protect the program:
“While the trust fund insolvency date may fluctuate from year to year, the urgent need to boost the program’s financing and benefits remains consistent. The clock is running down. The time for fair, just, and equitable action that safeguards Social Security’s financial stability is now.” – Max Richtman, NCPSSM President and CEO
The National Committee supports legislation introduced in the House by Rep. John Larson (D-CT) that would put Social Security on a path to financial stability, Social Security 2100: A Sacred Trust. It would also boost benefits for everyone on Social Security and adopt a more accurate COLA formula to help seniors better cope with inflation. To pay for these improvements, the bill would require those earning over $400,000 a year in wages to contribute their fair share through an adjustment in the payroll wage cap.
Larson’s bill has more than 200 cosponsors in the House, but not a single Republican has stepped up to support Social Security 2100. In past years, the GOP has called for raising the retirement age, privatization, and more recently, ‘sunsetting’ Social Security and other vital programs every five years.
President Biden, who during the campaign called Social Security and Medicare “sacred obligations” to the American people, rejected the Republican approach:
“Led by (National Republican Senatorial Committee) Chair, Rick Scott, their plan would put (Social Security and Medicare) on the chopping block every five years. That’s not the way to strengthen these programs. I will work with anyone willing to have an open and honest conversation about… strengthening the programs that millions of Americans rely on.” – President Biden, 6/2/22
NCPSSM President Max Richtman says that the public supports boosting, not cutting, Social Security. “Poll after poll shows that, across party lines, the American people want the kind of improvements in Rep. Larson’s bill, not harmful benefit cuts.”
In their report yesterday, The Trustees themselves urged prompt, pro-active action by Congress to strengthen Social Security’s finances:
“Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits. Social Security (plays) a critical role in the lives of 66 million beneficiaries and 182 million covered workers and their families… With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.” – 2022 OASDI Trustees Report, 6/2/22
According to the Washington Post, the Trustees based their new projections, in part, “on a stronger and faster economic recovery” than predicted in 2021 during the midst of the pandemic. Meanwhile, the New York Times reported that “for now, (the Trustees) are also assuming that the pandemic will not affect the long-term solvency of Social Security.”
The Trustees also reported, as they do every year, on the financial outlook for Medicare’s Part A trust fund. That forecast improved this year, with the shortfall date for the Part A trust fund projected to occur in 2028 – two years later than predicted in last year’s report. According to the Reuters, “That change is due mostly to the improved economic forecast, since the program is funded through payroll taxes.”