We’re 8 Years Away From an Automatic 23 Percent Cut in Social Security Payouts
Reckless spending has been driving Social Security toward a fiscal cliff. Scheduled benefits will have to be cut by 23 percent in 2033 to keep the program solvent.
This is the grim conclusion drawn by the trustees of Social Security’s Old-Age and Survivors Insurance and Disability Insurance (OASDI) trust funds, who published their annual report this week. OASDI comprises two trust funds, but the main one—the Old-Age and Survivors Insurance (OASI) trust fund—is on track to be depleted in 2033. That means all retirees receiving benefits in that year will face a 23 percent cut to their monthly checks.
The trustees’ report also warns that OASDI will become insolvent in 2034. The trustees calculate this earlier depletion date in part because of a law Congress passed late last year to expand Social Security benefits to some workers who previously did not receive them.
Reason’s Eric Boehm explains that the Social Security Fairness Act expanded Social Security benefits to public sector workers hired before 1984, despite those workers being exempted from contributing to the payroll taxes that fund the program. The Cato Institute’s Romina Boccia and Ivane Nachkebia affirm that the “significant worsening of the program’s finances since last year is largely the resul
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