Social Security Insolvency and the Need for Public Awareness - Peter G. Peterson Foundation; AMAC

Social Security’s revenue from payroll taxes (i.e., FICA tax) has not been able to completely cover benefits paid since 2010 and, since 2021, all sources of revenue coming into the program have been insufficient to make scheduled benefit payments. Consequently, Social Security has begun to deplete its asset reserves to keep promised benefits flowing…a fact that will lead to substantial across-the-board benefit reductions less than a decade from now.

That summary should not be news to anyone, since financial media outlets have been covering it for some time, and since Social Security’s trustees have been publicly warning Congress for about three decades. But believe it or not, a study published by the Peter G. Peterson Foundation reports that 70 percent of Americans are unaware of the dilemma facing Social Security just nine years from now. Further, Americans appear to not have a firm grasp on the severity of the situation and the potential for a $17,000 reduction in annual benefits for a married couple. Coincidentally, the Peterson survey noted that the “U.S. Fiscal Confidence Index in May fell to a one-year low of 36 (100 is neutral).”

The Peterson survey findings seem stunning, given both the magnitude of the problem and the length of time that it has been a public and political concern. Despite the ambivalence, the temperature is heating up in Congress as the 118th session enters its last quarter, and multiple hearings are taking place to explore the potential for resolution. For additional information on the Peterson study results, click here.

What’s needed to achieve a greater level of public awareness of Social Security’s plight is bipartisan and bicameral publicity. In addition, increased attention through affected parties–and that’s pretty much everyone–contacting their congressional representatives can go a long way toward bringing the political process into focus on this significant issue. The longer it takes to achieve a resolution, the more traumatic the “fixes” will need to be.

As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized.  This can be achieved without payroll tax increases through modifications to various areas of the benefit calculation process.  AMAC Action, AMAC’s advocacy arm, supports an increase in the threshold where benefits are taxed and then indexed for inflation, and calls for eliminating the reduction in people’s benefits for those choosing to work before full retirement age.  AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade. To learn more about AMAC’s approach to resolving Social Security’s dilemma, click here.

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