05 Jun 2024 Social Security: Five Fast Facts for Congress in Economics and Finance, Retirement and Social Security
Updated to reflect the 2024 Social Security Trustees Report.
1. Unless Congress acts, the program’s primary trust fund—the Old-Age and Survivors Insurance (OASI) trust fund—will only be able to pay full scheduled benefits until 2033 (according to the program’s trustees). At that point, all monthly benefit payments will be cut by 21%.
2. The longer we put off addressing Social Security’s financial problems, the harder they get to solve. In 2016, the Bipartisan Policy Center (BPC)’s Commission on Retirement Security and Personal Savings recommended a comprehensive package of reforms to modernize the program and address its solvency for 75 years and beyond. The commission, however, recommended this balanced approach nearly a decade ago, and since then, the program’s challenges have grown while the time to address them has shrunk.
- In 2016, for example, closing the 75-year deficit of OASI combined with the much smaller Disability Insurance program through an increase in the payroll tax rate alone (for illustrative purposes) would have required raising the tax rate by 2.6 percentage points. In 2024, closing the deficit would require an increase of 3.3 percentage points, and the required increase when the trust fund becomes depleted will be 4.0 percentage points.
3. A root cause of Social Security’s financial woes: an aging population. More Americans will turn 65 in 2024 than ever before, exacerbating the strain on Social Security’s finances that has been growing for decades. In the 1980s and 90s, when Social Security was running annual surpluses, there were nearly four workers contributing payroll taxes for every OASI beneficiary. In 2023, however, that ratio dropped to just three-to-one, and it is projected to be under 2.5-to-one by the 2060s.
4. Enhancing Social Security benefits—particularly for those who most rely on them in retirement—and putting the program on a fiscally sustainable path are not mutually exclusive policy priorities. The 13 recommendations BPC’s commission outlined would have made Social Security solvent while increasing household income in retirement for the lowest-earning 40% of workers. Far from relying only on tax increases or benefit cuts, these recommendations reflected the compromise—and emphasis on supporting vulnerable beneficiaries—that will be vital for any solution to garner the necessary bipartisan support.
5. Some of the highest-impact reform proposals were shown to have public support from Americans across the ideological spectrum. A recent national survey in which participants received a background briefing, heard arguments for and against various Social Security reform options, and then recommended a course of action found significant support among Republicans, Democrats, and Independents for some of the proposals often considered the most controversial, such as raising the retirement age, increasing the payroll tax rate, and reducing benefits for high-income earners.
