For the first time in 39 years, the cost of Social Security payments will exceed tax revenues in 2021.
The Social Security and Medicare Boards of Trustees’ latest report suggests the pandemic-induced lockdowns and economic shuttering is to blame, writing, “The finances of both programs have been significantly affected by the pandemic and the recession of 2020. Employment, earnings, interest rates, and GDP dropped substantially in the second calendar quarter of 2020 … with the level of worker productivity and thus GDP assumed to be permanently lowered by 1 percent even as they are projected to resume their pre-pandemic trajectories.”
The report also casts a grim shadow on the future of Social Security services. The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be exhausted by 2033, one year earlier than previous predictions. The Disability Insurance (DI) Trust Fund, which pays disability benefits, will be able to pay scheduled benefits until 2057, 8 years earlier than in last year’s report.
“The report also presents information that combines the reserves of these two funds in order to illustrate the actuarial status of the Social Security program as a whole. The hypothetical combined OASI and DI funds would be able to pay scheduled benefits on a timely basis until 2034, one year earlier than reported last year. At that time, the combined funds’ reserves will become depleted and continuing tax income will be sufficient to pay 78 percent of scheduled benefits.”
Since the beginning of the pandemic and lockdowns, lawmakers passed stimulus bills to boost the economy and aid Americans who were out of work. The checks, along with unprecedented state unemployment benefits, created national debt and spurred inflation.
ARTICLE: ANTOINETTE AHO
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: WALL STREET JOURNAL
Latest posts by Antoinette Aho (see all)
- House Democrats block Iron Done money from government funding bill - September 27, 2021
- DHS temporarily suspends use of horse units in Del Rio amid backlash - September 27, 2021
- New York City to enforce $50 fines for maskless transit riders - September 27, 2021