Social Security has always seemed like a future problem, with experts long predicting a benefits squeeze in the decades ahead. But the coronavirus has put tens of millions of Americans out of work, and economists are predicting that the recovery will take years.
That means the future is now.
If nothing is done to shore up the program, all benefit checks would need to be cut by roughly one-quarter in perhaps 11 years — or, if the recession is protracted and severe, maybe even sooner.
“We thought we had more than a decade, and now it could be less than a decade,” said Kathleen Romig, a senior policy analyst at the Center on Budget and Policy Priorities. “That makes a big difference both psychologically and in policy terms.”
The pandemic has hastened the cash crunch’s arrival by wiping out jobs and the payroll taxes — Social Security’s dedicated source of revenue — that they provide. Fewer people are paying into the retirement trust fund, and the longer they’re out of work, the deeper the problem becomes. (Even more pressing may be a fix for Social Security’s disability program, which has a trust fund of its own. A report issued by the Congressional Budget Office last month projects that fund could be exhausted in 2026.)Read Full Article