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The Social Security Administration (SSA), will have to cut back the benefits for 2034 if Congress does nothing to address the program’s long-term funding shortfall , according to a report Annual Released Tuesday by the Trustees of Social Security and Medicare .
# BREAKING ! The 2021 Annual Trustees Report is available now. Learn more on the # SocialSecurity blog: https://t.co/RZiN1iOuK5 pic.twitter.com/qWKu6mxfdl
– Social Security (@SocialSecurity) August 31, 2021
That is one year earlier than what was reported last year.
For 2034, the combined trust funds for Social Security will be depleted and will be able to pay only the 78% of benefits promised to retirees and disabled beneficiaries , according CNN.
The Covid Pandemic – 19 and the economic recession are to blame for increase SSA depletion rate in one year, driven by large drop in employment and resulting decline in tax revenue on payroll.
SSA trustees also project higher death rate up to 2023 and a short-term delay in births.
But it is not clear what the long-term effects of the coronavirus pandemic will be on funds d Social Security and the federal agency will continue to monitor developments. Last year’s report did not take into account the effects of the pandemic.
Medicare projections are roughly on par with last year’s report. The trust fund for Medicare Part A, which covers the costs of hospitals and nursing homes for the elderly, will be depleted by 2026, the same year that was reported last year. At that time, the program could only pay the 91% of promised profits.
Medicare Part B, which helps seniors pay for doctor visits and outpatient care, as well as Part D, which covers prescription drug benefits, are “adequately funded into the indefinite future,” according to the report. That’s because the law requires automatic funding for them.
By the end of 2020, about 65 millions of people received Social Security benefits and nearly 63 millions were covered by Medicare.
Agency trustees urged lawmakers to act sooner rather than later to address the long-term deficit . But Congress has long tried to address the solvency of trust funds . Legislators could raise payroll taxes, lower benefits, or enact a combination of both.
President Joe Biden campaigned to expand Social Security benefits, but his financial agenda so far has left the benefits program intact.