New analysis shows that seniors will soon face massive cuts to their social security if Washington continues to kick the can down the road. The Social Security Trust fund will go bankrupt by 2023, leaving millions of seniors high and dry.
CBS reports, “Unless the program is shored up before 2033, the typical newly retired, dual-earner couple will see their Social Security checks reduced by $17,400 annually, or $1,450 per month, according to the report from the nonpartisan Committee for a Responsible Federal Budget.
A newly retired couple with one earner would see a cut of $13,100, the report said. The analysis, which is based on current dollars, doesn’t forecast the impact on newly retired single earners, but the Social Security Administration has estimated that benefits will be cut by 23% in 2033 unless the program is strengthened.
Those cuts could prove devastating to roughly 50 million older Americans who receive Social Security checks, with the Committee for a Responsible Federal Budget forecasting that “senior poverty would rise significantly upon insolvency.” Still, there are plenty of proposals to fix Social Security’s looming funding shortfall, either by raising taxes or increasing the retirement age, or a combination of the two.
The current average monthly benefit check for single earners is about $1,800, according to the Social Security Administration.”
The authors of the new study also pointed out the numbers being used are in current dollars. When “Bidenomics” and its rapid inflation is accounted for, “low-, medium- and high-income couples would face $8,500, $14,000 and $18,500 cuts, respectively.
‘Although the cut for a low-income couple would be smaller, it would represent a larger share of their income – and so senior poverty would rise significantly upon insolvency,” the report states. “Any 2024 presidential candidate who pledges not to touch Social Security is implicitly endorsing a 23 percent across-the-board benefit cut for the 70 million retirees when the Social Security retirement trust fund reaches insolvency in just a decade.”
There are few options available to keep the program healthy: raise taxes, raise eligibility age, cut costs or rely more on general revenues to cover the gap in funding, which could mean higher budget deficits or potential cuts to other programs,” noted The Hill.
Neither Republicans nor Democrats have any plan to actually fix Social Security so that it exists in less than a decade.
As The Washington Post noted six months ago: “It was one of the most startling moments of President Biden’s State of the Union address: Heckled by Republicans for accusing them of trying to cut Social Security and Medicare, the president stopped to register the reaction.
“As we all apparently agree: Social Security and Medicare is off the books now, right?” Biden said.
Republicans in the Capitol applauded in response.
“We’ve got unanimity!” the president added, in apparent surprise.
The ad-libbed exchange on Tuesday night encapsulated a newfound reality in Washington: Leaders of both parties have become unwilling to discuss potential changes to Social Security and Medicare — even as time dwindles before they reach financial insolvency and benefit reductions for tens of millions of American seniors will automatically go into effect. What used to be a routine point of at least nominal agreement on “hard choices” about the budget is, for now at least, off-limits as Washington grapples with GOP demands to cut federal spending in exchange for raising the nation’s debt limit.”
Polling shows why we’re going to have to wait for a total collapse in the Trust fund before any action gets taken.
“A new poll from Social Security Works and Data for Progress of 1,191 likely voters highlights one big concern about that approach — that it would require benefit cuts.
When the voters were asked whether they would support the creation of a commission that would be “tasked with cutting some forms of government spending, including Social Security and Medicare,” 72% of respondents said they opposed the move. While 22% supported it, 7% said they didn’t know. (The values do not add up to 100% due to rounding.)
The poll also asked respondents whether they would vote for their member of Congress in 2024 if they joined a commission that recommended cuts to Social Security and Medicare benefits. The results found 67% of those surveyed would be less likely to vote for their member, 15% would be more likely to support them and 18% said it would not impact their decision.
“Even just taking an initial step to think about possibly cutting Social Security is not something voters would want to see,” said Danielle Deiseroth, executive director at Data for Progress.”
Can anyone in DC offer a plan that doesn’t cut benefits? If they can’t, those cuts will come whether they like it or not.