The combined trust funds for Social Security are set to expire a year later than previously expected, a board governing the program’s accounts said Monday.
In the latest report, the trustees project that the exhaustion date for the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays Social Security benefits to retirees, and the program’s smaller Disability Insurance (DI) Trust Fund will be 2035 .
Biden administration officials said the projected exhaustion date for OASI trust funds has moved to November 2033, seven months later than last year’s projection, in part due to economic growth.
In a conference call with reporters before the launch, an official said administrators raised the assumed level of labor productivity and gross domestic product (GDP) in the coming years after economic growth exceeded expectations last year.
He said administrators also reduced the assumed final incidence rate of workers with disabilities and revised downward the final total fertility rate assumption from 2.0 children per woman to 1.9 – the lowest assumed by administrators in their reports.
In turn, however, the official said that lower disability and fertility rates contributed to higher age-specific employment rates and GDP.
Although both trust funds are separate, in the past they have been considered as a combined fund when discussing program solvency, relying on interfund loans between accounts to temporarily extend solvency.
Social Security Administration Commissioner Martin O’Malley praised the projection as “a good news measure for the millions of Americans who rely on Social Security,” while also noting that “any potential benefit reduction event was postponed from 2034 to 2035”.
But he also called on Congress to “take action” to extend the life of the program.
“Eliminating the deficit will bring peace of mind to the more than 70 million Social Security beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation,” he said.
Once the OASI trust fund reserves are exhausted, the report predicts that revenues from the account will only be able to cover 79 percent of scheduled benefits for beneficiaries.
In a statement Monday, Jason Fichtner, chief economist at the Bipartisan Policy Center, noted “another year of inaction by lawmakers to protect this crucial program that so many Americans depend on.”
“Far from protecting beneficiaries, this stance leads us to automatic and across-the-board benefit cuts of more than 20 percent when the Old Age and Survivors Insurance trust fund runs dry, which the trustees expect will happen in 2033, less than 10 years from now on,” Fichtner said, adding that only “pragmatic, bipartisan policymaking can avoid these cuts.”
This story originally appeared on thehill.com read the full story
