Social Security is in jeopardy of cutting benefits in just a decade, and no one's stepping in to fix it

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Social Security is in jeopardy of cutting benefits in just a decade, and no one's stepping in to fix it
President Joe Biden speaks about his administration's plans to protect Social Security and Medicare and lower healthcare costs, Thursday, February 9, 2023, at the University of Tampa in Tampa, Florida.Patrick Semansky/AP Photo
  • The latest Social Security and Medicare Board of Trustees report lays out estimates for both programs.
  • The trustees find that Social Security will be unable to pay full benefits in about 10 years.
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The clock is still ticking for Social Security.

The program will only be able to pay out full benefits for the next decade or so, according to the latest report from the Social Security and Medicare Board of Trustees.

And neither party is doing much to save the crucial program.

The Trustees' report estimates that the Old-Age and Survivors Insurance (OASI) Trust Fund, a primary fund for Social Security, will only be able to pay out full benefits through 2033 — a year earlier than expected. When that fund's outlook is combined with the outlook for Disability Insurance, what's called OASDI and frequently used as a gauge for Social Security robustness, the funds will be able to pay out full benefits until 2034. That's again a year earlier than anticipated.

Importantly, that doesn't mean that, past 2033 or 2034, there will be no Social Security benefits or the program will be bankrupt. Instead, those expiration dates mark the last day the programs are expected to be able to pay out full benefits. Come 2033, for instance, OASI will only be able to pay out 77% of benefits.

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Estimates for those funds went down because the trustees anticipated that GDP and labor productivity will actually be 3% lower. The report finds that Medicare and Social Security costs will start growing faster than GDP come the mid 2030s, "primarily due to the rapid aging of the US population." In other words, you can blame baby boomers: They're rapidly retiring, and birth rates falling since baby boomers has led to less employment, and subsequently less GDP.

Some programs will actually be able to provide full benefits for longer than anticipated: The Hospital Insurance Trust Fund, a key Medicare program, will be able to pay out full benefits through 2031, three years longer than estimated last year.

"Social Security and Medicare are two bedrock programs that older American rely upon for their retirement security," Treasury Secretary Janet Yellen said in a statement. "The Biden-Harris Administration is committed to ensuring the long-term viability of these critical programs so that retirees can receive the hard-earned benefits they're owed."

The two programs are an especially hot topic right now as lawmakers are debating raising the debt ceiling before the US defaults on its debt. Since Republicans took over control of the House, they have been using the debt ceiling as a bargaining chip to achieve their own priorities in the form of significant spending cuts.

That had Democrats, and Biden, concerned that Social Security and Medicare would be on the chopping block. Even as Speaker of the House Kevin McCarthy and his GOP colleagues have vehemently denied that the programs are a part of negotiations, Republicans have yet to put forth a concrete plan for cutting spending — which is why Democrats aren't convinced.

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"House Republicans are determined to cut Social Security and Medicare," House Minority Leader Hakeem Jeffries wrote on Twitter on Wednesday. "Is that why they continue to hide their extreme budget from the American people?"

Kilolo Kijakazi, the acting commissioner of Social Security, said in a statement that the trustees still recommend Congress step in in a "timely manner" to address their projected shortfalls.

"Social Security will continue to play a critical role in the lives of 67 million beneficiaries and 180 million workers and their families during 2023," Kijakazi said. "With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations."

Some Democratic lawmakers have taken steps to ensure Social Security's solvency extends far beyond the next decade. Last month, Massachusetts Sen. Elizabeth Warren and Vermont Sen. Bernie Sanders joined some of their Democratic colleagues in introducing a bill to keep the program solvent through 2096.

"Our job is to expand Social Security so that every senior in America can retire with the dignity that they deserve and every person with a disability can live with the security they need," Sanders said in a statement.

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