Funding for Social Security will dry up sooner than expected, according to new findings from the Congressional Budget Office.
Published this week, the agency’s annual report Budget and economic outlook found that without government intervention, the Social Security Administration will be insolvent by 2032 — one year earlier than expected by the CBO in December 2022.
Its report forecasts government spending for the next 10 years. According CBO Director Phillip Swagelthe Social Security Trust Fund depletion date now falls within this window.
If and when it runs out, the federal government will only be able to pay 75% to 80% of the scheduled benefits, according to the CBO report.
Continue reading: Answers to your questions about social security
More … than 66 million Americans depend on Social Security, whether for retirement or disability benefits, including nearly 9 out of 10 people aged 65 and over.
In his State of the Union address on February 7, President Joe Biden accused some in the GOP — “not a majority” — of wanting to cut Social Security. On Friday, Republican Senator Rick Scott of Florida dropped Social Security and Medicare of his proposal to force all federal duties to be killed off every five years and subject to congressional review.
According to the CBO report, Social Security spending is expected to reach $1.3 trillion this year, an increase of $123 billion, or 10%, from 2022. This rise can be attributed to the 8.7% cost of living adjustment added to monthly checks, Swagel said.
This is the largest increase in more than 40 years.
“There was high inflation – which led to a high COLA, and then those benefits affect the solvency of the trust fund,” he said.
Not everyone agrees with the CBO’s predictions: A June 2022 report by the Social Security and Medicare Board of Trustees has set a “go bankrupt” date of 2035, one year later than the 2034 exhaust date announced in 2021.
“The economic recovery from the 2020 recession has been stronger and faster than predicted in last year’s reports,” the committee said in its findings.
The board did not immediately respond to a request for comment on the Congressional Budget Office’s findings.
For more information on Social Security, discover whether your benefits are taxable and learn when you can expect your monthly check.