Social Security Trust Fund report to document impacts of Covid-19

For months, Social Security watchers around the country have been asking when the annual trustees report documenting the funding status of the Social Security and Medicare programs will be released. It looks like the long wait may soon be over.

On Aug. 25, the Committee for a Responsible Federal Budget, a non-profit organization focused on fiscal policy analysis, issued a statement noting the “Social Security and Medicare Trustees are expected to release their annual reports this month.” Considering August 31 is tomorrow, there is a good chance the long-delayed report could be issued on Tuesday.

Separately, Sen. Mike Crapo, R-Idaho and ranking member of the Senate Finance Committee, released a letter on Aug. 26 that he wrote to Comptroller General Gene Dodaro, head of the Government Accountability Office, asking the agency to monitor the delivery of trustees reports on the financial status of Medicare and the Social Security trust funds.

In his letter, Crapo noted the Social Security Act requires trustees reports to be issued each year, no later than April 1.

“The 2021 report has not yet been issued and it is now 147 days overdue — the longest delay in the history of the reports since 1995,” Crapo wrote.

“The notification process is at best woefully inadequate and at worst almost causally indifferent to the important information contained in the trustees reports regarding the financial status of the funds, which are currently facing eventual exhaustion,” he wrote.

“To date, we have only been provided with vague identification of when this year’s trustees report will be issued through random telephone calls and via an August 18 email from the Chief Actuary of the Social Security Administration stating: ‘Please hold close, but it looks like the 2021 Trustees Reports should be signed on August 31 in the early afternoon.’”

The 2020 trust fund report, which was released on April 22, 2020, projected the combined assets of the retirement, survivor and disability programs will be depleted in 2035 — unchanged from the previous year’s report. The trustees predicted Social Security would be able to pay only 79% of projected benefits from ongoing payroll tax revenues in 2035, resulting in a 21% across-the-aboard cut in benefits.

But the report did not reflect the potential impact of the Covid-19 pandemic.

The 2021 trustees report is expected to document the impact of the pandemic-induced recession, which likely decreased program revenue and increased program costs. For example, unemployed workers and their employers don’t make payroll tax contributions and many older unemployed workers filed for retirement benefits sooner than they had planned.

The Committee on a Responsible Federal Budget also announced it would host a virtual event on Wednesday, Sept. 1 to discuss the current status of the major trust funds and potential policy reforms to improve their solvency.

“Policymakers need to act sooner rather than later to secure the Social Security and Medicare Trust Funds, prevent abrupt across-the-board benefit cuts, assure a more sustainable debt path, promote faster economic growth, and achieve a number of important policy goals,” the committee said in a news release announcing the virtual event.

The forum will feature remarks from Rep. John Larson, D-Conn. and chairman of the House Ways and Means Social Security Subcommittee, as well as Sen. Bill Cassidy, R-La. and ranking member of the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth. The event will also include two panel of experts on Social Security and Medicare.