Some experts warn that Social Security’s trust fund could be pushed to insolvency before 2030 because of the coronavirus pandemic, reports Politico.
A 2020 report published in late April by the Social Security Board of Trustees said the $2.9 trillion in asset reserves that disburse retirement, disability and other Social Security benefits would be depleted by 2035, but experts are now pushing that projected date up.
“It’s clearly going to be a lot worse than that,” said Alan Auerbach, an economist at the University of California, Berkeley.
Unemployment is a big factor, as 36.5 million workers are not paying into the government account that funds retirement benefits. Additionally, a surge in early retirement could prove damaging.
The Bipartisan Policy Center in an analysis released in April said that the Disability Insurance (DI) trust fund’s reserves may be depleted during the next presidential term, and the Old-Age and Survivors Insurance (OASI) trust fund’s reserves may be depleted right around the time of the 2028 presidential election.
“There’s going to be a real reckoning,” said Rep. John Larson, D-Conn., who chairs the House Ways and Means Social Security Subcommittee and has proposed raising both benefits and taxes. “This is going to get people's attention.”
Rep. Steve Womack, the ranking Republican on the House Budget Committee, has recommended a commission to study the issue and make recommendations to lawmakers.
“I don’t know when we’re going to decide to take up the issue,” he said. “I hope and I pray that it‘s not when we have no other real options other than something draconian like big cuts or the fact that we’ve got to infuse a bunch of capital into the program to save people from a loss of benefits.“