A new report from the Conference Board suggests solutions to the insolvency crisis that's looming for the Social Security trust funds.
In a brief titled "Saving Social Security," the board’s policy think tank warned that the federal retirement program's trust funds are on track to run out of money by 2033 unless substantial reforms are implemented.
“With the US national debt ballooning over $34 trillion, annual deficits projected to average $2 trillion for the next 10 years, and debt servicing demanding a growing share of the federal budget, US fiscal policy needs urgent and comprehensive debt reduction and reform. Saving Social Security is an important part of this effort,” said the report from the Conference Board's Committee for Economic Development.
“In 2022, Social Security spent $147 billion more than it brought in, and that gap is expected to widen to $670 billion in 2033,” according to the report. “In total, Social Security is projected to incur cash deficits of $4.5 trillion over the next decade.”
Among several reforms to extend the solvency of Social Security, the CED suggested raising the retirement age to 69, implementing means testing for high-income beneficiaries, and increasing the taxable income cap.
It also recommended removing work disincentives for retirees, diversifying trust fund investments, revisiting the calculation of cost-of-living adjustments, and extending coverage to new state and local workers.
The CED also called on the government to create a bipartisan Congressional Commission on Fiscal Responsibility, which would evaluate the different policy options.
The document details how the Social Security program's costs have surpassed its payroll tax revenues since 2010, leading to a slow depletion of the Old-Age and Survivors Insurance Trust Fund's reserves.
The Social Security Administration – the government agency in charge of running social insurance programs – now forecasts that without reform, US retirees will see their Social Security benefits slashed by 23% once the OASI fund falls off its projected 2033 insolvency cliff.
“If policymakers act now, they have a number of options at their disposal to bolster the program and save it for future generations of American retirees,” the report said.
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