Social Security Insolvent in 10 Years Unless Congress Acts, CBO Director Says
The two trust funds that undergird the Social Security system will have a zero balance in 10 years, forcing a 25 percent reduction in payments to all beneficiaries, Phillip Swagel, director of the nonpartisan Congressional Budget Office (CBO), told lawmakers on July 12.
The Social Security program includes two trust funds, Old-Age and Survivors Insurance and Disability Insurance, which provide 25 percent of the payments made to beneficiaries. Both funds will be exhausted by 2034, according to Mr. Swagel, leaving only revenue from payroll taxes to supply benefits. That will mean an immediate 25 percent cut in benefits the day the money runs out.
“In 2034, Social Security revenues are projected to equal 75 percent of the program’s scheduled outlays, resulting in a 25 percent shortfall. Thus, CBO estimates that Social Security benefits would be reduced by 25 percent in 2034 under the payable-benefits scenario,” Mr. Swagel testified before the Senate Budget Committee on July 12….