Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)
Social Security Outlook Worsens New Report Shows Trust Funds Could Run Dry by 2033
WASHINGTON -- Surging energy prices and a slower-than-expected economic recovery have worsened the financial outlook for Social Security compared with last year, while the picture for Medicare remains grim but essentially unchanged, according to annual forecasts released by the government Monday.
The trustees overseeing Social Security reported that the program's trust fund will be depleted by 2033 -- three years earlier than projected last year. After that, incoming Social Security tax revenue will cover only three-fourths of the benefits scheduled to be paid out through 2086, requiring Congress to either increase taxes or reduce benefits.
The fiscal health of Social Security declined even more precipitously according to another, somewhat technical measure. This statistic reflects the difference over the next 75 years between projected benefits and the expected annual income of the U.S. workers whose taxes will finance them. This measure hit its worst level since the early 1980s, when the trust fund's imminent insolvency prompted Congress to enact various changes.
At a news conference to release Monday's reports, administration officials and program trustees took turns urging Congress to find the kind of bipartisan solution that has long eluded it.
"Never since the 1983 reforms have we come as close to the point of trust fund depletion as we are right now," warned Charles Blahous, one of the trustees for Medicare and Social Security. "Our window for dealing with [the shortfall] without substantially disruptive consequences is closing fairly rapidly."
Social Security's bleak outlook is primarily driven by the ever- larger numbers of the baby boom generation entering retirement. And the trustees said a major reason this year's 75-year forecast was worse than the last was simply that they were measuring one year further into the future.
They also cited two unforeseen economic factors: Rising energy prices necessitated a larger benefit cost-of-living increase, and worker earnings -- and resulting payroll taxes used to pay for Social Security -- were lower than expected. …