Falling on deaf ears

The reprehensible inaction by Congress has caused the Social Security Trust to get closer to insolvency.

There is no excuse and you should hold them accountable.

Conclusion from the June 2, 2022 Social Security Trustee Report

Under the intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2035. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust Fund reserves are projected to become depleted in 2034, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. DI Trust Fund asset reserves are not projected to become depleted during the 75-year period ending in 2096.

Lawmakers have a broad continuum of policy options that would close or reduce Social Security’s long-term financing shortfall. Cost estimates for many such policy options are available at http://www.ssa.gov/OACT/solvency/provisions/

The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits. Social Security will play a critical role in the lives of 66million beneficiaries and 182 million covered workers and their families during 2022. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations


  1. So long as Americans believe someone else should pay to fill the gap, Congress won’t act. So long as Congress and the Executive Branch of our Government keep lying to the American people that they “paid for” their benefits, especially those who have commenced (or will commence prior to trust fund exhaustion), Congress won’t act.

    It is important to note that without Congressional action, there is no cut in benefits. That is, the benefits that cannot be paid due to lack of funding become a damn IOU – further increasing the burden on those too young to vote and generations yet unborn.

    Social Security: If a trust fund became depleted and current receipts were insufficient to cover current expenditures, there would be a conflict between two federal laws. Under the Social Security Act, beneficiaries would still be legally entitled to their full scheduled benefits. However, the Antideficiency Act prohibits government spending in excess of available funds, so the Social Security Administration (SSA) would not have legal authority to pay full Social Security benefits on time.

    It is unclear what specific actions SSA would take if a trust fund were insolvent. After depletion, the trust funds would continue to receive tax revenues, from which a majority of scheduled benefits could be paid. One option would be to pay full benefits on a delayed schedule; another would be to make timely but reduced payments. Social Security beneficiaries would remain legally entitled to full, timely benefits and could take legal action to claim the balance of their benefits.

    Medicare: Keep in mind that Medicare Part B and Part D are funded with general tax revenues. So those benefits will continue to be paid so long as the federal government can run deficits.

    The practical function of the HI trust fund is to permit the continued payment of bills in the event of a temporary financial strain (e.g., lower income or higher costs than expected) without requiring legislative action. As long as the HI trust fund has a balance (i.e., securities are credited to the fund), the Treasury Department is authorized to make payments for Medicare Part A services. If the HI trust fund is not able to pay all current expenses out of current income and accumulated trust fund assets, the HI trust fund is considered to be insolvent. To date, the HI trust fund has never become insolvent.

    There are no provisions in the Social Security Act that govern what would happen if insolvency were to occur. For example, the program has no statutory authority to use general revenues (income and other taxation) to fund Part A services in the event of insolvency. While there will no longer be sufficient funds to fully cover Part A expenditures, the trust fund would continue to receive tax and other income, those funds would cover approximately 91% of Part A expenses.

    The Medicare trustees have suggested that in the event of HI trust fund insolvency, there could initially be delays in payments to plans and providers and, following soon after, beneficiary access to Part A services could “rapidly be curtailed.” The Social Security Act does not specify what would happen if the HI trust fund were to become
    insolvent – what actions CMS might take. CMS could choose to pay full benefits on a delayed schedule or, alternatively, to make timely but reduced payments.

    However, assuming that the response is simply to reduce Medicare reimbursements to say Medicaid levels, that would place the financial strain on hospitals and other Part A providers (dialysis, etc.) In that event, expect some providers to opt out of Medicare (as most have already opted out of Medicaid) and we will soon have a new version of the wild, wild west.

    One can only guess how this might affect funding of the ever-increasingly favored Medicare Advantage options. And, if you were a corporate benefits weenie, and your firm offered retiree medical coverage, what would you do with respect to those 70, 80, 90 year olds covered in your plan?

    Given your retiree medical plan’s integration with Medicare and all the rules Medicare requires, what could you do? More importantly, given that we are talking about HI exhaustion in 2026 or 2028, what can you do (what should you be doing) today!?


  2. Will benefits be cut for people already on S.S. after many years. For instance, a person who is 80+ years and dependent upon the monthly payment and has no other substantial means?


    1. Depending on what Congress does, this is the statement from Social Security on your personal report. There is a link that takes you to a web site and here is was it says:
      “Even if legislative changes are not made before 2034, we’ll still be able to pay 78 percent of each benefit due”. Note: “each benefit due”.

      I am sure this website has not been update with the new report information. Such statements have been on the bottom of your personalized statements or with links going back over a decade.



    2. I don’t see benefits being cut for anyone. It would be political suicide. However, when you see that the trust fund will only be able to pay 77% of of earned benefits, that would apply to everyone currently collecting Social Security – but I would not worry about it actually happening.


      1. Expect to see “revenue raisers”, new taxes, new surcharges, lowering IRMAA threshold, and yes they will likely have to apply to people receiving benefits – but likely over some minimum dollar threshold.

        Same old story – over promise to buy votes then stick it to current workers and generations to come.

        I mean, those 80 year olds obviously, as a group, failed to fund their own benefits. It would be great to see someone calculate the generational funding and benefit comparison so we would know who truly “earned” their benefit.


  3. I don’t see anywhere that congress is lining up on raising rates, extending age requirement, or any other way of dealing with social security. I’m sure that there are individual preferences that have to be worked through so it is not a one day piece of work to get legislation. It is going to be a long slog.
    I’m not concerned about the trust fund but it would be good for people doing advance planning to know what to expect from social security in retirement.


  4. So after I post here this morning, I was reading Yahoo Financial news. Several articles are trumpeting that Social Security reduction in benefits is pushed back a year since the 2021 report (all true). Therefore the crisis is delayed, pop the champagne.
    AARP issued a statement that basically said it needs to be fixed now.


  5. One thing is for sure, no action will taken before midterms other than expand the entitlements to buy votes for both parties.
    Until national lobbying groups like AARP demand reform to save Social Security instead of expanding Social Security or bigger COLAs, no politican is going to touch the third rail that Social Security is. 2032 election is going to be a fun election as we elect the president who either saves or kills Social Security.


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