Full funding for Social Security will run out a year earlier than anticipated, according to a report by the Congressional Budget Office.
Released on Feb. 15, the nonpartisan agency’s annual Budget and Economic Outlook found that, without government intervention, the Social Security Administration trust fund will become insolvent in 2032.
Last March, the CBO predicted a “go-broke” date of 2024. In December, it revised that to 2033.
Should the fund be depleted, according to the CBO, the federal government will only be able to pay 75% to 80% of scheduled Social Security benefits.
Nearly 47 million American retirees receive Social Security, 40% of whom rely solely on their benefits for income.
In his State of the Union address, President Joe Biden accused some in the GOP of wanting to cut the program’s funding. On Feb. 17, Republican Sen. Rick Scott of Florida dropped Social Security and Medicare from his proposal to force all federal entitlements to undergo congressional review every five years.
According to the CBO report, Social Security outlays are expected to hit $1.3 trillion this year, an increase of $123 billion from 2022. That bump can be attributed to the 8.7% cost-of-living adjustment, or COLA, added to beneficiaries’ monthly checks, CBO Director Phillip Swagel told reporters last week.
“There was high inflation — that resulted in a high COLA, and then those benefits affect the solvency of the trust fund,” he said.
Read on: Your Social Security Questions Answered
Not everyone agrees with the CBO’s predictions: A June 2022 report by the Social Security and Medicare Board of Trustees set a “go broke” date of 2035, one year later than the 2034 exhaustion date it announced in 2021.
“Economic recovery from the 2020 recession has been stronger and faster than assumed in last year’s reports,” the committee said in its findings.
The Board of Trustees declined to comment on the Congressional Budget Office findings.
For more on Social Security, find out if your benefits are taxable and learn when you can expect your monthly check.
Social Security Will Become Insolvent Earlier Than Predicted, Government Report Says – CNET
Source: Media Star Philippines
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