Amid the increasingly damning reports on the rising threat of America’s runaway deficits and debt, the looming disaster that could upend the lifestyle of tens of millions of elderly Americans is getting scant attention. In less than seven years, the Social Security retirement trust fund will go broke, and under federal law, its insolvency will automatically trigger gigantic reductions in benefits. According to estimates from the nonpartisan Committee for a Responsible Federal Budget (CRFB), low- and medium-income retired couples would respectively face hits of $11,200 and $18,400 a year, shrinking the dollars they’re pocketing from Social Security by around one-quarter. To grasp the weight of that sudden blow: America’s seniors, on average, depend on the nine-decades-old program for over half their livelihoods.
Social Security’s math problem is long-standing—and chronically ignored by Congress. Starting in 2010, the program began running cash flow negative, meaning that its outlays exceeded its tax revenues. Ever since then, it’s been paying benefits by drawing down the reserves accumulated when a far higher proportion of Americans were working than retiring versus the sharply falling ratio today. By 2033, the trust fund will run dry, triggering that immense, across-the-board drop that is slated to punish the most vulnerable Americans by collapsing all benefits an equal share regardless of income.
