CRFB Warns of “Large, Abrupt Cuts” in Social Security Ahead

It’s still years away, but millions of Americans will feel the sting.

The Social Security and Medicare trustees issued their 2017 annual report on Thursday, and it began with an alarm bell.

“Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing,” the trustees wrote in the summary of the 268-page document. “The Trustees recommend that lawmakers take action sooner rather than later to address these shortfalls.”

The Trustees also projected the biggest increase in payouts in years—a 2.2% increase—which comes to an average of about $28 per person.

Insolvency is on track for 2028 for the disability fund and 2034 for seniors. Insolvent, however, does not mean empty; it means that the funds would not be able to completely fulfill its debts to the public. It’s not as bad as a $0 check sent to American seniors, but the stakes are still high.

As the Committee for a Responsible Federal Budget, a non-partisan group dedicated to balancing the budget, noted in a paper on Friday, the cuts would be “large” and  “abrupt” and growing from 23% in 2034 to 27% in 2091. The late-century date may prove reassuring to some, but a 23% cut takes the average Social Security benefit payout from around $1,400 to $1,080. This would be a significant blow.

Source: SSA, CRFB

A root cause for the financial woes for Medicare and Social Security is the aging baby boomer population, and the trustees estimate the cost jumps will be higher than any GDP growth that could potentially offset things. Meanwhile, lawmakers have not made progress addressing the difference between these two numbers by raising more money, raising the retirement age or dialing back payments.

“The gap is getting bigger, and politicians have their heads in the sand,” said Marc Goldwein of the Committee for a Responsible Federal Budget.

Politically, the available options are incredibly explosive. Raising taxes is unpopular, and restricting payments to seniors is also unpopular. This leaves both Democrats and Republicans at an impasse.

Full story at Yahoo Finance

Read the CRFB analysis here

16 Comments

  • Have Obama and Hillary pay back all the money they stole to start and fund ISIS. Have Hillary pay back the 3 billion she “lost” when SOS. Have Congress pay back the trillions they stole out of SSI over the years! And do not raise SSI taxes before doing the above! That’s where you need to start!!!

    • And who pays for this? First of all, no money was “stolen” from SSI. In 1966, LBJ signed a law merging SS into the general budget. SS taxes go into the general budget, SS payments come out of general fund.
      SS is NOT ISOLATED like the US postal service or patent office.

  • Raise the SS Tax maximimunincome limit by $123,000 to $25,000 annually. This would provide an immediate cash infusion.
    Most people aren’t even aware that a persons income on wages I’ve $127,000 a year ARENT even taxed by a penny! You read that right. Talk to your congressman. Even if income from wages over the income limit were taxed at half of the current rate and up to $250,000 annually it would be a HUGE shot in the arm for Social Security.
    Tell me someone can live with any kind of dignity on $1,400 a month.

    • Are you nuts TQ Marty!!! Our annual income was over $150,000 last year and we paid right at $40,000 in taxes.
      You need to look at your paycheck stubs or were you planted here by the left?

      • Desta, I was proven psychologically sound when I went through a nasty divorce. I did, as a retired Marine, get custody of my young daughters as a result. So to answer your question, no I’m not nuts.
        If the Social Security income limit we’re raised to $250,000, and here’s another option, tax income all the way to $500,000, but at incrementally lower rates. And provide wording that neither congress or anyone else can ever “tap” the SS fund as they’ve done before.
        I am more of a Libertarian than anything else, so no I’m not a lefty plant. But in today’s economy the upper limit for SS taxation is far too low. We lived in the DC area before I retired and I can’t tell you that with nearly $300,000 annual income, we’d have had to rely on SS if we’d had problems. And we did. And now I’m retired on disability and our income is half of what it was.
        Contrary to belief, making $127,000 a year does not make one rich. Being able to depend on the money I paid into Social Security for 36 years is very helpful to our family.
        The increase I’m talking about will effect higher earners far less than those making more money.
        I pay taxes too. Even my SSDI is taxed. But the cash infusion it would create would make SS solvent for far longer than it is projected right now and for far more people as a result.
        Pray that you aren’t taken from the workforce prematurely and lose all that income. It is very disheartening and I can tell you from experience that it is a difficult task to get SSDI in any case.
        So yes you pay taxes, as do we. Next year when the new law takes affect you may pay less.
        Think about those taxes when you’re driving on interstates and have electricity 24/7/365 and have cable tv or streaming internet at the prices you do.
        I’m not saying our government is efficient or effective, but I’ll tell you this, the more you pay in the more you’re gonna get back someday, month after month and year after year. Pray that you don’t succumb at age 50 to career ending injury and get to spend the rest of your life going from one Dr appointment to the next and hoping you can afford it all.
        We made a similar amount last year and were both retired. We planned well. Our tax bill was similar to yours. I complain like you do. But you’re crying about less than $2,000 if your income above the limit we’re taxed at the same rate by SS.
        Someone making $254,000 would see their SS taxes doubled if it were t a graduating prorated tax. Who can afford to pay 7.5% more, or the family of 4 making $75,000?
        You’re blessed. You complain about taxes (as do I) but you’re making the money. Romney got hammered when he mentioned the 47%. But it is an absolute truth. Slightly over 50% of american workers pay 99% of the taxes after all is said and done. It’s been like that, it is like that and it will be like that.

  • Arrest all the traitors in this country from the highest ranking to the lowest ranking, freeze all their assets and give it back to the tax payers they stole it from. This would help make America great again.
    If they did ever get out of prison, they would have nothing and would have to start from scratch just like the rest of us did.

    • OK, I’ll play crazy with you Desta. “Arrest all the traitors”? Please define “traitor” so we can get the proper warrants.
      Arresting what I have to assume are people who are rich, and jailing them is going to help make America great again? Sounds very Hitleresque to me.
      How many of these rich people started without a silver spoon? How many Bill Gates working out of a garage in Albuquerque or Mark Zuckerbergs are you going to arrest? Where is your baseline? And are people born into wealth inherently bad? Why don’t they deserve the fruits of their ancestors? How many Hershey’s, or Carnegie’s will be jailed?
      In the world you propose all of the successful people will be jailed and the ones who haven’t accomplished as much will be the recipients of the re-distributed booty? How will that have made America great?
      If there’s a crazy test, would YOU pass it? Please leave me and my family, who started with high school educations and had 6 kids and worked our way up the rungs because of our hard work and talent out of your “You”-topia.

  • If my former solution gets knocked down, then I say, everyone on SS should come together and Sue the U.S. Government for stealing the $ we were promised by the government when S.S. was first introduced. It was never supposed to be used for anyone’s personal pet project in the first place. Now the government intities can’t seem to keep their hands off of it.
    SS was originally supposed to be a savings program for every working person that would be paid back to them, with interest at the time of retirement.
    We were lied to and hoodwinked into believing they cared. Can you imagine that!