Social Security Reserves Projected to Run Out Earlier Than Expected

[Zorro]

Source: Wall Street Journal

An economic slowdown, persistent inflation and weaker productivity growth will hurt Social Security’s finances, draining its reserves one year earlier than previously estimated, the government said Friday.

Social Security won’t have enough money to pay all beneficiaries the amount they are entitled to starting in 2034, according to the latest report by the program’s trustees. Unless Congress takes action to shore up the program, beneficiaries would receive about 80% of their scheduled benefits after that point.

Lower birthrates over the past few decades combined with a wave of retiring baby boomers have challenged the long-term solvency of Social Security, which pays benefits to retirees, their survivors and people with disabilities.

In 2021, Social Security began paying more in benefits than it was receiving through payroll taxes and interest on the specially issued Treasury securities it holds in reserve. That has reduced the size of its trust fund to $2.8 trillion in 2022 from $2.9 trillion in 2020.

Read more: https://www.wsj.com/articles/social-security-reserves-projected-to-run-out-earlier-than-previously-forecast-60932de5?st=txaoam56lug4m3m&reflink=share_mobilewebshare

[TreasonousBastard]

1. Another tax break for billionaires should solve the problem.

[TeamProg]

20. Yes, since tax cuts generate more revenue. Everybody knows that..

[Ray Bruns]

46. You beat me to it.

[multigraincracker]

2. Remove all caps on income.

The rich need to reward the hard workers that made them rich, while they pay little if any tax on their earnings. Put a SS tax on all dividends, until they pay the same as earned income that their employees pay.
This would a good start.

[raging moderate]

3. Yes. You are right.

I hope enough people in our country come to their senses and realize how they have been played by these people. Fair is fair!

[walkingman]

4. Simple solution - if nothing else a compromise by a slow rise in FRA and removing the cap.

Ignoring the problem is not a solution and is totally irresponsible.

[mahina]

8. Fra?

?

[walkingman]

14. Full Retirement Age

Presently....

Full Retirement By Year Of Birth

1943-1954 66
1955 - 66 and 2 months
1956 - 66 and 4 months
1957 - 66 and 6 months
1958 - 66 and 8 months
1959 - 66 and 10 months
1960 and later - 67

[Farmer-Rick]

43. How high do your want the Full Retirement Age? Is 67 high enough for you?

Right now it's supposed to rise to 67. But if you want, you can wait until 70. Anyone can wait until 70. So, if you feel the retirement age should be higher for Social Security, you can lead by example and wait to take your retirement as late as you want even 80 or 90.

Congress gets it's pension for retirement at age 62. Shouldn't their retirement age match our retirement age?

If they are alright with making us wait until 67, maybe they should wait with their retirement age.

[Karma13612]

59. 👏👍❤️ EOM

[aggiesal]

17. The rich don't pay payroll taxes ...

and raising taxes doesn't help Social Security, because general tax by law can't find Social Security.

The only way to shore up Social Security is to raise the cap on yearly income.
This year the cap is $160,200. That means that anyone making a salary that pays into Social Security don't pay into Social Security on their salary above the cap.

The figure discussed is to set the cap at $400,000. I prefer lifting the cap to $1M.

After rereading your post, I agree that the rich should pay into SS from their dividend earnings.

[multigraincracker]

21. Might also tax Stock Buy Backs at 40%

With that money going SS. Has to be the biggest give away to CEOs ever. Most of their compensation comes from stock options and the wealthy own almost 90% of this stocks. I remember when they use to split stocks to make them more attractive to the small investors.
There are a lot of ways shore up that fund and changing the laws should be just fine with me.
Getting rid of dark money and shining some light on who are the ones are pushing for the unfair taxes would be a great start and outlawing lobbyists.
The fairest tax would be on wealth, not income. Those Trust Fund families skip taxes all together. The wealthy keep controlling a greater share of all wealth, while the middle and poor less and less. Let’s try trickle up wealth.

[aggiesal]

25. 👍🏼

[Delphinus]

27. That's

a good idea, one I'd not heard of.

[roamer65]

23. I support getting rid of the cap completely on worker portion of FICA.

The more you make, the more you pay.

[moose65]

40. Maybe....

But, that needs to be coupled with an absolute maximum amount that one can draw from SS. We don't need to be paying billionaires tens of thousands of dollars each month from SS. Right now, there's a formula that relates the amount drawn to the amount paid in. That would need to change.

Another thought - if the cap were eliminated, could the rate be lowered some? That would help people on the lower end more. Right now, we all pay 6.2% into SS up to earnings of 160,000 or so. If there were no cap, could the rate be lowered some? How much? To 5%? 4%? I don't know, really.

[MichMan]

48. Should have done it before the election when we held the House

[mitch96]

56. Yup, make it a % of before tax income and the problem is solved...nt

[RegulatedCapitalistD]

5. Cheap Labor Conservatism

Last edited Sat Apr 1, 2023, 09:19 AM - Edit history (1)

Has starved our Social Safety Net since Reagan Derugulated Capitalism....

By artificially keeping wages low, and eliminating good paying Union Jobs, and moving manufacturing to Communist Countries for Slave Labor there, and forcing American Labor to compete with that slave Labor has caused that.

The Rich have been stealing our wealth since Reagan

[Tanuki]

36. Well said, and a belated welcome to DU!

[cstanleytech]

6. This is why the Republicans arent going to cut benefits now they just will bankrupt SS by

refusing to do anything to help shore it up.

[Baked Potato]

7. Just stop the payments and see what happens, rich fucks...nt

[Journeyman]

12. They fail to realize "Social Security" protects the social order . . .

When classes of people begin to starve in the dark, when they die freezing in homes they cannot sustain, only then will the willfully blind begin to see how much social order is dependent on the security of all.

Only then will they realize again the hell we sought to suppress when we fought and marched in ’35.

[Baked Potato]

19. Fuckin' A! Yes!! This is exactly what I'm saying!

[Uncle Joe]

9. Remove the caps and tax the robots.

Thanks for the thread Zorro

[peppertree]

10. Sinnerma and Manchini don't like it though

It gives their big donors a sad and a mad.

[LudwigPastorius]

11. C'mon you Republican fucks,...

campaign on not shoring up Social Security benefits.

I implore you.

[David__77]

13. I don't want to hear any "adults in the room" bullshit.

No “bipartisan commissions.” The U.S. can choose to fund this program with general revenue.

[summer_in_TX]

15. As if we needed more motivation to work like hell to elect

Democratic majorities in both Houses of Congress and to re-elect Joe Biden.

[yaesu]

16. The economy killing Fed is probably celebrating this in their gold plated bankster office. nt

[Hekate]

18. A rising tide swamps all boats

[multigraincracker]

22. The French have the right idea.

Go to the streets and shut it down and that fails, off with their heads.

[progree]

24. 🌺 Good news - Medicare to last 3 more years: from 2028 to 2031

Actually that's about the Medicare HI Trust fund.

As always, re: the other part of Medicare (Part B),

"The Supplemental Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because, unlike the other trust funds, its main financing sources--premiums on enrolled beneficiaries and federal contributions from the Treasury--are automatically adjusted each year to cover costs for the upcoming year. Although the financing is assured, the rapidly rising SMI costs have been steadily increasing demands on beneficiaries and general taxpayers."

... Despite the downward revision to economic assumptions, the projected long-term finances of the HI Trust Fund improved since last year’s report. The improvement is mainly due to lower projected health-care spending stemming from updated analysis that uses more recent data.

SMI Trust Fund expenditures for Medicare Part B as a share of GDP are also projected to be lower than previously estimated in part for the same reason. In addition, expenditures on drugs under SMI in Medicare Parts B and D are projected to be markedly lower as a share of GDP due to the impact of provisions of the Inflation Reduction Act, which became law in August 2022.

(emphasis added by progree)

From the source (includes both Social Security and Medicare, and the main summary is at the beginning and that is quite readable and one doesn't have to worry about the media screwing it up)

A SUMMARY OF THE 2023 ANNUAL REPORTS - Social Security and Medicare Boards of Trustees,
https://www.ssa.gov/oact/TRSUM/index.html
(PDF: https://www.ssa.gov/oact/TRSUM/tr23summary.pdf )

On Social Security, over the last 4 annual trustees' reports, the hypothetical OASDI depletion date has moved 2035->2034->2035->2034

Since last year's reports, projected long-term finances of the OASI and the OASDI Trust Funds worsened due to the Trustees revising down the expected levels of gross domestic product (GDP) and labor productivity by about 3 percent over the projection window. The Trustees made this change as they reassessed their expectations for the economy in light of recent developments, including updated data on inflation and U.S. economic output.

[MichMan]

49. I am pretty certain you can pay any extra amount you like voluntarily.

[twodogsbarking]

28. Social Security is a series of insurance instruments controlled by the government.

Each person has their own account. Projecting future claims and the current cost can be
calculated and applied. Raising the limit is not the answer. The answer is treating SS as the product that it is
and not using it to project gloom and doom. If there are social programs needed beyond SS then they should
be funded by tax dollars, with the wealthy paying more taxes. Keep SS separate as it can sustain itself if run properly.

Article is purposely misleading and mostly bunk.

[progree]

31. "Keep SS separate as it can sustain itself if run properly"

How so?

https://www.ssa.gov/oact/TRSUM/index.html
The report is signed by 4 Biden administration officials

By the Trustees:

Janet Yellen, Secretary of the Treasury, and Managing Trustee of the Trust Funds.

Xavier Becerra, Secretary of Health and Human Services, and Trustee.

Julie A. Su, Acting Secretary of Labor, and Trustee.

Kilolo Kijakazi, Acting Commissioner of Social Security, and Trustee.

Just as they signed the last one and the year before. They all project the SS trust funds will run out in 2034 or 2035. So did the ones signed by prior administrations, for decades.

The Congressional Budget Office a few months ago projected 2032 as the trust funds depletion date.

I never have heard any opinion from any economist or government official in decades that it won't run out somewhere around this time frame.

[twodogsbarking]

33. So exactly why is it not funding itself? Insurance companies sell products that

fund themselves and produce a profit. I think we are being snowed. It is not as big a deal as it is made to be.
Remove programs from SS that should not be part of SS and fund them by taxes. SS can work but not without change.
It is not a tax but politicians attempt to make it so and deplete it to get their way. Fix it, don't predict its demise.

[progree]

34. I believe the Social Security and Medicare Trustees and the Congressional Budget Office

I don't know where you get your ideas.

"Insurance companies sell products that fund themselves and produce a profit. "

SS was never set up that way. It would have to charge more. This has been long known for decades.

"Remove programs from SS that should not be part of SS and fund them by taxes. "

OK. Depends on what you call "should not be part of SS". And what part of SS is not being funded by payroll taxes? And by income taxes on SS benefits that are directed to SS (not to the general fund).

"SS can work but not without change."

We agree.

"It is not a tax but politicians attempt to make it so"

Its been funded by payroll taxes since the beginning. And by income taxes on benefits since the 1980s (which are directed to SS). Calling the funding something else isn't going to help the situation one iota.

"politicians attempt to make it so and deplete it to get their way"

who told you politicians are depleting it to get their way?

"don't predict its demise."

The trust funds are projected to run out in a decade and then revenue from payroll taxes will be sufficient to fund only partial benefits. Per the trustees: "80 percent of scheduled Social Security benefits would be payable at that time, declining to 74 percent by 2097."

Do you think high Biden administration officials would sign a report like that if they didn't think so?

The trustees and CBO don't project its demise. But cuts will occur in about a decade unless Congress acts to increase revenue or whatever word you want to use. If you have other information, please provide some links. Linkless assertions of opinions as fact count for nothing.

[twodogsbarking]

38. Thanks for your condescending input.

[bucolic_frolic]

29. A trust fund that depends on what revenue Congress legislates

rather than on invested assets (like an annuity) and is inflation indexed. What could go wrong?

[Igel]

41. The trust fund depends on

what's placed in it by the SSA and on the interest the funds produce.

The only place excess FICA can go is to the SS trust fund; the only place the monies can be paid out to is the SSA. Now, "invested" the Congress certainly used that money--it's a part of the total national debt, but not the publicly held debt.

When the trust fund is drawn down Congress will have to authorize the issuance of more public debt.

When the trust fund runs out, OASI is insolvent because it can't meet its obligations but it won't be broke, it'll just pay out less.

[TexasBushwhacker]

50. "Public debt" is treasury securities which is something wealthy people invest in

By law, any excess Social Security must be invested in US Treasury securities, which pay a small amount of interest but are the most secure investment vehicles on the planet.

[MichMan]

51. Millions of people own treasury securities in their retirement accounts

They aren't all wealthy

[Vinca]

30. The solution to this is so simple it makes your head hurt. Raise the income cap for deductions.

The fat cats carping the loudest wouldn't even miss it.

[friend of a friend]

32. Change Social Security laws, collect on more types of income such as stocks.

On stocks, collect at the end of the year on profit shown on the 1099-B form. Also, raise the cap.

[Scrivener7]

35. Social Security reserves are ALWAYS projected to run out earlier than forecast.

I'd say it's a problem with the forecast. Because a fair tax would solve any shortfall in a jiffy.

[progree]

37. Link? I haven't heard that one before. I've been reading the Trustees reports for decades

And the projected depletion date has varied from 2042 to I think 2034 has been the earliest such forecast date, which is the latest too.

It has never "run out", though it would have in the 1980s if payroll taxes had not been raised.

[Scrivener7]

39. It's a perennial republiQan sound byte.

[Farmer-Rick]

45. Yeah, I wonder if they have updated their calculations

And methods to include shorten lifespans due to COVID.

[honest.abe]

42. Harsh but once the baby boomers die off the situation might improve.

Last edited Sat Apr 1, 2023, 12:31 PM - Edit history (1)

I would like to see the longer term projections. Could be the number of those collecting SS will drop off significantly and the reserves will be replenished.

[progree]

55. They project 75 years - out to 2097

and the situation gets slightly worse -- from payroll tax revenue being able to fund 80% of scheduled benefits after the trust funds are exhausted, to 74% in 2097.

https://www.ssa.gov/oact/TRSUM/index.html

[Farmer-Rick]

44. I wonder why all those dead COVID victims

Who suddenly didn't collect their Social Security, help with this.

So many people died that our average life expectancy declined. That is significant. So it makes me wonder about all these the sky is falling for Social Security are telling the truth. What population numbers are they using? What life expectancy calculations are they using? And COVID is the gift that keeps on giving. Long COVID can continue to kill.

In the 1918 pandemic, survivors died earlier than populations before that virus hit. So, expect the same thing here.....

I think the calculations they use should be seriously questioned.

[Ligyron]

47. Let more immigrants In

Legally as citizens even so they can help pay into the fund

[snot]

52. Bernie Sanders (& Liz Warren's?) pending bill would boost benefits AND make the program solvent.

"To ensure the program can pay out future benefits and then some, Sanders proposes subjecting earnings over $250,000 to the 12.4% payroll tax while not counting the new taxed earnings toward a person’s benefits."

More at https://www.huffpost.com/entry/bernie-sanders-social-security_n_63ea9921e4b0808b91c1f518

[Turbineguy]

53. A golden opportunity for the GOP

to fuck the country.

All they have to do is what comes naturally to them. Not govern.

[Yavin4]

54. More immigration is a solution.

More workers paying into the system.

[discntnt_irny_srcsm]

57. Lift the cap. How hard is that? n/t

[OldBaldy1701E]

58. I am not worried.

My body is going to give up the ghost long before I hit 'retirement age'. As badly as I need that money that I spent almost 50 years paying into the system, I guess the government feels I am not worth any attempt at assistance (Social Security Disability). Oh well.