2021 Social Security Trustees Report – MIA - RealClear Politics
The annual Social Security Trustee Report for 2021 was due to Congress way back in April (April 1, specifically), but to date, nothing has been seen. As Mark J. Warshawsky, senior fellow at the American Enterprise Institute points out in a post today on RealClear Politics, “The trustees’ reports contain essential information on the current operations of Social Security and Medicare, the state of the trust funds, and, most importantly, actuarial projections of the future finances of these massive programs. These concern nearly all Americans, taxpayers and beneficiaries alike. The reports give Congress and the administration an in-depth analysis of how these programs will affect the federal budget, and how solvent they are, given future expected economic and demographic conditions, both in the short-run and over many decades ahead.”
As most everybody knows, last year’s Trustees Report noted that the program is now paying out more than it’s taking in, placing the combined Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Fund reserves on a trajectory that would see them fully depleted by 2035, with an estimated 21% across-the-board decrease in payments to beneficiaries. That was the news then, and it appears at this point that the situation is continuing to deteriorate.
In fact, the Congressional Budget Office (CBO) in July 2021 confirmed its projection from earlier in the year that the depletion date for the combined Social Security Trust Funds now stands at 2032—a full three years earlier than the Trustees’ projection of record at that time. This projection, of course, assumes that current laws governing Social Security revenue and disbursements remain unchanged over the forecast period. The CBO included in its mid-year comments the observation that immediate payroll tax increases, reduction in scheduled benefits, or a combination of both would be necessary to continue scheduled benefits beyond the trust fund depletion, with the potential of a 25% benefit cut being the alternative.
As Warshawsky notes in his article, “(t)he public needs to know” what’s happening regarding Social Security’s long-term financial picture, especially in light of government spending plans currently in the news. His experience as a previous deputy commissioner for retirement and disability policy at the Social Security Administration qualifies him to raise the question, and you can read his thoughts in the article here…
Social Security’s solvency issue has been a known problem for many, many years, and will not go away on its own. As a result, the need for permanent correction via program reform continues to hurtle toward the 2032 cliff cited by the CBO. The Association of Mature American Citizens (AMAC) has been at the forefront trying to strengthen Social Security by developing and proposing its Social Security Guarantee. AMAC has been discussing and continues to discuss this common-sense solution with Congressional Representatives in its efforts to protect America’s senior citizens who rely on Social Security. To review AMAC‘s Social Security Guarantee, click here.
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All previous reports by the SS Trustees have included a section that addresses specifically the budgetary implications on the General Fund due to current revenue not covering current outlays for Social Security and Medicare programs. No such information is included for 2021.
I believe it was $465 Billion for 2020.
Why was that section omitted?
Denny,
We are still analyzing the full 2021 Trustees’ Report but we have no insight into why certain sections may be different from previous year’s reports. The Trustees’ Report is supposed to be issued in April of each year, but this year’s report was not released until last week, about 5 months later than normal. We have been focused on the elements of the report which deal with when the Social Security Trust Funds (there are two of them) will be depleted, and were pleasantly surprised that the impact of the pandemic on the economy resulted in only a one year change from the 2020 report (many had predicted much worse). The 2021 report forecasts that the combined trust funds will be depleted in 2034, the same year as was predicted in the 2019 report. Because of the robust economy, the 2020 report (on 2019 results) predicted 2035 as the year the Trust Fund would run dry, but the 2021 report again predicts 2034. Whether Congress will permit that to happen is anyone’s guess, but we believe that to be highly improbable. Congress knows how to fix the SS solvency issue – what’s missing is the bipartisanship and fortitude needed to do it before it becomes an emergency. The longer they wait, the more difficult it will be to fix.
Russell Gloor
National Social Security Advisor
The AMAC Foundation