The main trust fund used to support the payment of Social Security benefits is set to run dry sometime in 2033 or 2034, according to the latest government estimates, at which time promised benefits are expected to be cut by more than 20%.
Now, a new report published by the Committee for a Responsible Federal Budget seeks to put a dollar figure on the pending cuts, finding the average dual-income couple retiring at the time of trust fund depletion would see a $16,500 cut in annual benefits.
As the report authors emphasize, former President Donald Trump and Vice President Kamala Harris have both said on the campaign trail that they would "protect" the Social Security program. However, neither has yet put forward a plan to meaningfully do so.
In fact, Trump has proposed eliminating taxes on Social Security benefits, which would significantly worsen the program's finances, according to the nonpartisan advocacy organization.
Ultimately, policymakers must take action in the years ahead to address the program's funding woes, or they will consign millions of Americans to a lower standard of living in retirement. The good news is that lawmakers have many potential levers to pull to help right the ship without putting too much of a burden on any given set of stakeholders.
A Fundamental Imbalance
The Social Security funding crunch is a big problem, according to the report, but its causes are straightforward. Simply put, people are living longer lives in retirement at the same time that the U.S. population is becoming increasingly top-heavy.
As a result, the Social Security program is paying out more in benefits than it collects in payroll tax and other revenue, and it is drawing down its reserves to cover the remaining cost of benefits, the authors observe.
