U.S. Social Security trust funds that cover benefits for more than 60 million Americans are now set to be depleted by 2034, one year earlier than expected.
- The latest annual Social Security report highlighted a shortfall after 2034.
- Programs would only be able to cover 80% of benefits after that date.
- Treasury Secretary Janet Yellen reiterated a long-term commitment to funding the program.
According to a report released Friday by the Treasury Department, trust funds that support the program will not be able to sustain the demand for much longer. A combined OASDI fund, which would require a change in law, could cover scheduled benefits up to 80% after 2034.
Previous projections were adjusted to account for higher inflation, lower levels of labor productivity, and a 3% downgrade in gross domestic product.
The trustees urged action from Congress to protect the programs and noted proposals in President Joe Biden's budget would fund social security through taxes on the ultra-wealthy. Treasury Secretary Janet Yellen said the administration was “committed to ensuring the long-term viability” of the programs.
The president's proposed 2024 budget earmarked an extension of Social Security solvency into “at least” the 2050s.
Social Security's longevity has been a concern for at least a decade, as Baby Boomers have retired and put stress on the system. Because social security is funded by a payroll tax, when Baby Boomers leave the workforce but rely on the program there are not enough workers to pay out the full amount of benefits.
Members of Congress continue to put forth proposals to address the shortfall in the Social Security program.
The future of Medicare funding was also projected to be in slightly better shape than last estimated in the same report. Both programs are a large driver of government spending, as all eyes are on the standoff between Republicans and Democrats over the country's debt ceiling continues.