Will Congress Be Able to Protect Social Security?

Will Congress Be Able to Protect Social Security?

The Social Security Administration is currently unable to pay full benefits beyond 2033. 

Various surveys have shown that large percentages of Americans don’t believe that Social Security will be there for them when it’s time to retire. A government report last year appeared to confirm that those fears are well-founded.

The 2021 Social Security Trustees report, issued at the end of August 2021, stated that 2033 will be the last year that the Social Security Administration will be able to pay out full benefits. As a result, benefits will need to be reduced by 22 percent beginning in 2034 if nothing changes. That puts the date a year earlier than previously estimated.

It appears that will only change if Congress takes action to adjust the formula for how Social Security is funded. One proposal, Social Security 2100: A Sacred Trust, has been introduced in the House and has support from Democrats, although it’s not clear if it has the momentum to be passed. In fact, there has been no major legislation related to Social Security funding since the Reagan administration. George W. Bush launched an ill-fated proposal to partially privatize the program early in his second term.

Will Social Security really reach the point where benefits could be reduced? The issue hasn’t yet become something that the president, top leaders in Congress, or those who cover politics have been focusing on, but it could move in that direction as 2033 gets closer. It may get more attention in Washington because letting Social Security become dissipated would likely bring political consequences for those seen as responsible.

CNBC talked to some experts about the status of Social Security and what direction might be taken.

“It’s all predicated on money going in from current workers to money going out to beneficiaries,” Kathleen Romig, a Senior Policy Analyst at the Center on Budget and Policy Priorities, told CNBC. “You want to have the worker to beneficiary ratio at a sort of healthy level where you don’t have too few [working] people paying for too many beneficiaries.”

Alicia H. Munnell, Director of the Center of Retirement Research at Boston College, told the outlet that the Social Security issue can be dealt with in one of two ways: reducing benefits or increasing tax revenue. Neither scenario is likely to be popular, although any solution, especially in the current environment, would almost certainly need to be bipartisan.

“All we need is political will and that is something in scarce supply, even in the best of times. 2034 to a congressperson is a long time away … So there’s no incentive on the part of the people in Congress to solve this problem before it is imminent,” says Munnell. On the bright side, lawmakers will pay a political price if they fail to solve the problem.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters.