The revised projection for Social Security’s “go-broke” date comes as the Congressional Budget Office estimates higher inflation in the coming years.
By Joe Jurado
Get Up Mornings with Erica Campbell
https://getuperica.com/
A report released by the Congressional Budget Office (CBO) earlier this month finds that the Social Security trust could run dry by 2032, a year earlier than previously predicted.
According to CBS News, the projection regards the Old-Age and Survivors Insurance Trust Fund, one of the two funds from which Social Security benefits are withdrawn. It’s been less than a full calendar year since the CBO last revised its projections for when the trust will run dry. The adjustment resulted from the CBO updating its economic forecast, which predicts rising inflation in the coming years. This directly impacts Social Security’s cost-of-living adjustment (COLA), which is intended to prevent inflation from significantly eroding beneficiaries’ purchasing power.
The projected COLA for 2027 is on the higher end of projections at 3.1%, up from 2026’s COLA of 2.8%.
“My takeaway from all of this is we don’t have much time to spare to address the shortfall,” Max Richtman, CEO of the National Committee to Preserve Social Security and Medicare, a nonprofit advocacy group, told CBS News. “If there’s not enough revenue coming in payroll taxes — and I don’t see that changing — benefits are going to be cut dramatically.”You may be asking what it means if the Social Security trust runs dry. Well, for starters, benefits will still be distributed to those eligible, though likely at a reduced rate. The Center on Budget and Policy Priorities, a Washington, D.C.-based nonpartisan think tank, estimated last year that Social Security beneficiaries would receive 81% of their promised benefits if the trust fund ran out of money.
While it’s fair to say most of us are still having Social Security taxes deducted from our paychecks, the amount is far outpacing inflation. “As long as people are paying in, money is coming in,” Richtman said. “But the point is, it’s not enough to pay full benefits. The trust fund has been relied on over the last few years to fill in that gap.”
As Richtman pointed out, this isn’t a new problem by any means. For years, we’ve heard stories about Social Security eventually running out of money. As someone who came of age during the Great Recession, I remember wondering, even back then, why I was paying into a system that everyone kept saying would be insolvent by the time I could access it. Despite asking that question as far back as 2010, Congress kept kicking the can down the road, and the Social Security Administration eventually had to tap into the trust fund in 2021, when the cost of benefits began outpacing the agency’s income.
So why, after five years, is Congress still not doing anything about this? I’ll answer that question with another question: Have you seen our current-day Congress? Beyond being among the most dysfunctional in American history, both chambers are controlled by the GOP, whose entire ideology can be boiled down to the phrase “You will have nothing and like it.”
Considering that their big, beautiful bill places work requirements on Medicaid that will adversely affect people age 50 and older, it appears the GOP’s current solution is do nothing and make people work until they’re dead. You have to love living in the richest country on Earth.
