Millions of Americans could soon face a painful hit to their monthly income.
Social Security, the federal safety-net program that sends monthly checks to eligible retirees, disabled workers and surviving spouses, is facing mounting financial pressure. More than 71 million Americans depend on Social Security benefits, which often serve as a crucial replacement for income after retirement, disability or the death of a partner.
According to the Social Security Administration, if Congress does not act, the program’s trust fund reserves are projected to be depleted by 2033. After that point, the agency would be able to pay only about 78% of scheduled benefits — a shortfall that could cost the average recipient roughly $500 per month.
“This train wreck is going to happen,” Rep. Steve Womack (R-Ark.) told Politico, warning that lawmakers cannot afford to wait. “So as early as six years from now, we’re going to have to have a plan. And of course, I’m a big believer that we need to deal with it now, or we need to start the process of dealing with it now.”
With anxiety rising among beneficiaries and policy experts, members of Congress have introduced a wave of proposals aimed at strengthening Social Security’s long-term finances. So far, however, none of those bills have made it across the finish line.
In July, the Promise Act — bipartisan legislation from eight senators — would create a process for Congress to develop a plan to keep Social Security solvent for at least 50 years.
“I won’t pretend there’s consensus on how we solve this, but the math is unforgiving: the longer Congress waits to act, the fewer good options remain, which is why I am proud to support this legislation,” Senator Thom Tillis, who co-sponsored the bill, said.
Just before that, the Bipartisan Social Security Commission Act was introduced in June by two representatives which would also establish a committee to develop solutions.
The Social Security 2100 Act was also introduced back in June and would increase benefits while shoring up Social Security’s finances by making higher-income Americans pay more into the system.
According to the bill — which was first introduced back in 2017 — all current and new beneficiaries would see a 2% benefit increase, it would change how COLA is calculated and make other switches to benefit structure.
The new minimum benefit would change to 125% of the Federal poverty line, and switch the COLA calculation to the CPI for the Elderly (CPI-E).
The CPI-W currently calculates Social Security COLAs. It tracks the spending of working-age people — specifically wage and clerical workers. But it also tracks the cost of food, housing, energy, transportation and healthcare.
Meanwhile, the CPI-E is another measure for folks 62 and older, offering more information on expenses that directly impact seniors. Some advocates believe that this change would be more beneficial to Social Security recipients as it’s a “senior-focused” inflation measure instead of “working-person-focused.”
However, The Senior Citizens League (TSCL) — a non-partisan advocacy group that makes very accurate COLA projections — fear the chance of the bill passing is slim to none.
“Although the Social Security 2100 Act is unlikely to pass in the current Congress, it should. The bill is the gold standard for Social Security reform and accomplishes the majority of changes older Americans want to see for the program,” TSCL Executive Director Shannon Benton said.