Projected Social Security benefits cliff creeps up to 2032

Congress must act to shore up Social Security during the next six years to avoid an automatic drop-off in benefits in 2032, according to a report released Tuesday. 

The annual update on the Old Age and Survivors Insurance trust fund shows that it will “become depleted” in the fourth quarter of that year, a few months earlier than projected in last year’s report.

That would lead to recipients receiving 78% of their benefits — the projected yearly income to the trust fund — unless Congress acts before then. By 2100, benefits would be only 62%, according to the report.

That decrease would have a significant impact on the tens of millions of Americans who rely on the program to stay out of poverty, especially retirees. 

Social Security Commissioner Frank J. Bisignano wrote in a statement that in order to “protect the promise of Social Security, it is important for lawmakers and the Social Security Administration to work together to ensure the trust funds continue to provide financial stability now and for future generations.”

Bisignano is scheduled to testify before the House Ways and Means Committee on Wednesday, where he will likely face several questions about the new report and whether the administration has policy suggestions for Congress. 

More than 68 million Americans received Social Security payments in April, according to data from the administration. More than 56 million of the beneficiaries were 65 or older. 

Michael A. Peterson, CEO of the Peter G. Peterson Foundation, wrote in a statement November’s midterm elections will have an impact on who is in the Senate, where lawmakers have six-year terms, in the lead-up to the deadline. 

“It’s important to recognize that the Senators we elect this year will be in office when Social Security becomes unable to pay out full benefits, so this must be a central campaign issue,” he wrote. 

Peterson added that “there are many well-known solutions available” and that it’s “time for responsible, bipartisan leadership to strengthen Social Security and Medicare, ensuring the stability of these programs for generations of Americans to come.”

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, wrote in a statement that “Washington is sleepwalking into a retirement crisis, allowing our nation’s most important trust funds to go insolvent at the expense of over 70 million beneficiaries who count on these programs.”

MacGuineas added that there is “no shortage of options out there to avoid this.”

“It’s time for our leaders to start telling the truth on Social Security and Medicare, and working on real plans to save these programs,” she wrote. “Time is running out.”