Absent Congressional action, we’re down to just 9 years until Social Security’s trust fund will become depleted, according to the latest Social Security Board of Trustees annual report, released today. But instead of just 77% of benefits being payable at that time, the new report on the financial status of the Social Security Trust Funds says 79% of scheduled benefits will be payable.
The report also confirmed Social Security will be able to pay 100% of total scheduled benefits until 2033, which is unchanged from last year’s report.
In a press release, the Trustees highlighted that the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to have enough dedicated revenue to pay all scheduled benefits and associated administrative costs until 2035, which is actually one year later than projected last year, with 83% of benefits payable at that time.
“This year’s report is a measure of good news for the millions of Americans who depend on Social Security, including the roughly 50% of seniors for whom Social Security is the difference between poverty and living in dignity—any potential benefit reduction event has been pushed off from 2034 to 2035,” said Martin O’Malley, Commissioner of Social Security.
The two funds could not actually be combined unless there were a change in the law, but the combined projection of the two funds is frequently used to indicate the overall status of the Social Security program.
“Congress can and should take action to extend the financial health of the Trust Fund into the foreseeable future, just as it did in the past on a bipartisan basis.”
Social Security Commissioner Martin O’Malley
“More people are contributing to Social Security, thanks to strong economic policies that have yielded impressive wage growth, historic job creation, and a steady, low unemployment rate. So long as Americans across our country continue to work, Social Security can—and will—continue to pay benefits,” O’Malley added. “Congress can and should take action to extend the financial health of the Trust Fund into the foreseeable future, just as it did in the past on a bipartisan basis. Eliminating the shortfall will bring peace of mind to Social Security’s 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation.”
The report said projected long-term finances of the combined OASDI fund improved this year primarily due to an upward revision to the level of labor productivity over the projection period and a lower assumed long-term disability incidence rate. These improvements were partially offset by a decrease in the assumed long-term total fertility rate. The revision to labor productivity was based on stronger economic growth in 2023 than had been anticipated in last year’s reports. The Trustees lowered the long-term disability incidence and fertility rate assumptions based on continued low levels in both series.
More findings from the report:
- The asset reserves of the combined OASI and DI Trust Funds declined by $41 billion in 2023 to a total of $2.788 trillion.
- The total annual cost of the program is projected to exceed total annual income in 2024 and remain higher throughout the 75-year projection period. Total cost began to be higher than total income in 2021. Social Security’s cost has exceeded its non-interest income since 2010.
“Congress currently has several bills that address the shortfall without benefit cuts—it should debate and vote on these and any other proposals.”
Martin O’Malley
“I will continue to urge Congress to protect and support Social Security and restore the growth of the funds. Whether Congress chooses to eliminate the shortfall by increasing revenue, reducing benefits, or some combination, is a matter of political preference, not affordability,” O’Malley said. “Congress currently has several bills that address the shortfall without benefit cuts—it should debate and vote on these and any other proposals. It’s critical that Congress acts quickly to address the projected trust fund shortfalls, to gradually phase in necessary changes as the Trustees have recommended.”
Oklahoma Republican Congressman Tom Cole recently said “doing nothing about Social Security is not an option, and the biggest attack on Social Security really comes from those who want to simply ignore the issue.”
Cole, a member of the House Appropriations Committee since 2009, is trying to get Congress to act on the issue, and he sounded off about it in a weekly column posted on his congressional website in April.
Referring to the oft-cited 2023 Social Security and Medicare Board of Trustees report, Cole noted that if no policy changes are made, Social Security’s funds will be exhausted in 2033. “Without reform, in 2033 and so forth, Social Security will only be able to pay what comes in, and beneficiaries will only receive 77 cents on every dollar they are due. This would cut $391 from the average retired American’s $1,700 [Social Security] check,” Cole wrote.
The Board of Trustees usually comprises six members. Four serve by virtue of their positions with the federal government: Janet Yellen, Secretary of the Treasury and Managing Trustee; Martin O’Malley, Commissioner of Social Security; Xavier Becerra, Secretary of Health and Human Services; and Julie Su, Acting Secretary of Labor. The two public trustee positions are currently vacant.
View the 2024 Trustees Report at www.ssa.gov/OACT/TR/2024/.
SEE ALSO:
• Social Security Trust Fund Projected to be Depleted in a Decade
• Absent Action, Typical Couple Faces $17,400 Social Security Benefit Cut in 2033
• Oklahoma Congressman Stumps for Bipartisan Social Security Commission