The group of people in charge of the accounts for Social Security said that the funds for the program will be used up later than they previously thought.
In the most recent report, the people in charge of the funds predict that the Old-Age and Survivors Insurance (OASI) Trust Fund, which gives money to retired people, and the Disability Insurance (DI) Trust Fund will run out of money in 2035.
Officials from President Biden's administration said the date when the OASI funds will run out of money is now expected to be November 2033, which is seven months later than last year's prediction, partly because of economic growth.
Before the release of the report, a person said that the people in charge of the funds raised their assumed level of labor productivity and gross domestic product (GDP) for the coming years because the economy did better than expected last year.
The person said that the people in charge of the funds also decreased the estimated rate of disabled workers and lowered the estimated number of children per woman to 1.9 from 2.0, which is the lowest estimate made by the people in charge of the funds.
However, the person said that lower rates of disability and fertility led to higher employment rates and GDP.
Even though the trust funds are separate, people have thought of them as one fund when talking about the program's financial security. They have relied on borrowing between accounts to temporarily make the program financially solvent in the past.
The head of the Social Security Administration Martin O’Malley praised the prediction as good news for the millions of people who depend on Social Security, and mentioned that any potential benefit reduction event has been pushed to 2035 instead of 2034.
But he also urged Congress to do something to make the program last longer.
“Fixing the problem will give peace of mind to the 70 million people who get Social Security, the 180 million workers and their families who contribute to Social Security, and the whole country,” he said.
Once the reserves of the OASI trust fund are used up, the report predicts that the money coming in will only be enough to cover 79 percent of scheduled benefits for recipients.
In a statement on Monday, Jason Fichtner, chief economist for the Bipartisan Policy Center, marked “another year of inaction by lawmakers to protect this crucial program that so many Americans rely on.”
“Instead of protecting beneficiaries, this posturing takes us toward automatic across-the-board benefit cuts of over 20 percent when the Old–Age and Survivors Insurance trust fund runs out, which the Trustees expect to happen in 2033, less than 10 years from now,” Fichtner said, adding that only “practical, bipartisan policymaking can stop these cuts.”
