The Social Security trust fund is expected to run out of cash in eight years, according to a report released Wednesday by the program's trustees. Unless Congress acts before then, benefits for more than 60 million retirees and family members will automatically be cut by 23%.
The deadline is about nine months earlier than trustees were predicting a year ago. The change was primarily caused by a that increased benefits for nearly 3 million former public-sector workers who had pensions for jobs not covered by Social Security. Trustees also lowered their assumptions about future wages (and resulting payroll taxes) and birth rates.
More Americans have started drawing Social Security benefits , partly out of fear that benefits could be lower in the future.
The popular program's most basic challenge is demographic. The population of the United States is aging, with more than 11,000 baby boomers reaching retirement age daily.
For each person drawing Social Security, there are now fewer young workers paying taxes to support the system. The trust fund, built up over decades when baby boomers were working, provides a backstop for now. But once that money is gone, incoming payroll taxes will cover just 77% of promised retirement benefits.
A separate trust fund, supporting Social Security disability payments, is projected to remain solvent through 2099. If the two funds were combined — which would take an act of Congress — the pooled fund would last through 2034, after which benefits would automatically be cut by 19%.
Not increasing Social Security revenue is the same as "supporting benefit cuts"
Congress could address the shortfall in a number of ways — by raising taxes, cutting benefits or some combination of the two.
"Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare," the trustees said in a statement.
Maya MacGuineas, who heads the Committee for a Responsible Federal Budget, warned that lawmakers had already dragged their feet too long.
"At this point, any member of Congress without a plan to fix Social Security is shirking their duty to preserve the nation's largest and most important government program," MacGuineas said.
President Trump has vowed not to touch Social Security benefits. But if no changes are made to the program, the law calls for benefits to be cut automatically, once the trust fund is exhausted.
"Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts," says Nancy Altman, president of the advocacy group Social Security Works.
Taxing higher-income earners would help provide revenue
Currently, top earners don't pay Social Security taxes on any income above $176,100 a year. Altman says assessing Social Security taxes on higher income, including investment income, would provide enough revenue to keep paying full Social Security benefits through the end of the century.
"America is the wealthiest country in the history of the world, at the wealthiest moment in our history," Altman says. "That money can remain concentrated in the hands of billionaires, or it can go towards Social Security, enriching all of our lives."
Congressional Republicans have in the past proposed alternative fixes, including for younger workers and reducing the benefits formula.
The trustees' report comes as the Social Security Administration is , or about 12% of its workforce, leading to longer telephone wait times and reduced in-person appointments.
Altman argued that those staff cuts — made in the name of government efficiency — have done little to address Social Security's long-term financial challenges.
"Today's report is a reminder that even as DOGE's cuts to the Social Security Administration are wrecking Social Security's customer service, they are doing nothing to improve its solvency," Altman said.
The trustees also projected that a Medicare trust fund that helps cover hospital insurance will be depleted in eight years. That's three years earlier than projected last year, as a result of rising medical costs. Once the fund is exhausted, Medicare will have sufficient funds to cover only 89% of promised benefits.
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