(News Nation) — Social Security recipients could see their benefits cut by hundreds of dollars a month within about a decade if Congress doesn’t act.
Chief Actuary for Social Security and Medicare testified The looming bankruptcy was revealed in a report Thursday to the Republican-led House Budget Committee.
The trust fund that Social Security relies on to pay benefits is projected to be depleted in 2035, at which point only 83% of benefits will be paid. As of January 2024, Average monthly benefit That’s $1,907, so a 17% reduction would bring your regular check down to $1,583, a savings of $324 per month and $3,888 per year.
Why is funding drying up?
The trust fund that pays for retirement benefits is projected to run out even sooner, in 2033. If that happens, recipients’ benefits will automatically be cut by 21% unless Congress takes action.
“No Social Security benefits are permitted, much less required, in excess of the benefits available in the trust funds,” Steve Goss, the Social Security Administration’s chief actuary, told the House committee.
While 10 years may seem like a long time to solve a problem, officials warned that the challenges will become even more complicated if lawmakers put it off.
“Delaying action means that a more dramatic response will be needed later,” said Paul Spitalnick, chief actuary at the Centers for Medicare and Medicaid Services.
What can Congress do?
This year, on average Approximately 68 million people By 2035, the number of Americans over 65 who will receive monthly Social Security benefits is expected to reach 75 million.
Congress could address the funding challenge by raising revenue for the program through a payroll tax hike or by cutting benefits. Lawmakers have not agreed on either option.
“Democrats may have their own ideas about how to address our rapidly deteriorating fiscal situation, and Republicans may have their own ideas, but we must all acknowledge that the situation we face is unsustainable and something must be done,” House Budget Committee Chairman Jody Arrington (R-Texas) said in her opening remarks.
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The Committee The bill was passed The bill would create a bipartisan finance committee to make policy recommendations on programs like Social Security and Medicare, but the plan has not yet been introduced on the full House floor.
The last time Social Security was overhauled was nearly 40 years ago, when the federal government gradually raised the eligibility age from 65 to 67. When that happened in 1983, Social Security went bankrupt. Just a few months later.