Watchdog warns Social Security may run out of funds before its 100th anniversary
The Committee for a Responsible Federal Budget says Social Security’s trust fund could be exhausted in six years, forcing an automatic 22% benefit cut.
As Social Security celebrates its 91st year, the Committee for a Responsible Federal Budget cautioned that the retirement system’s trust fund is projected to be depleted within six years, activating an automatic 22% reduction in benefits under current law. For the typical recipient, that translates to about $500 less per month, a loss larger than the average retired household’s grocery spending. The watchdog stresses that substituting general federal revenue would inflate the national debt by $190 trillion over 75 years and fundamentally change Social Security from a self-financed program.
It outlines possible solutions, including taxing benefits, capping cost-of-living adjustments for high earners, imposing an employer-side compensation tax, and limiting benefits for affluent couples. A state-by-state analysis shows average cuts exceeding $500 in 29 states, potentially affecting up to 22% of residents and harming up to 1.9% of GDP. The committee urges Congress to form a bipartisan commission to craft a long-term solvency package, noting the last major reform in 1983 extended the system for about five decades. Without action, the program faces significant cuts well before its centennial.
Why it matters
Social Security funds millions of retirees; a shortfall could sharply reduce their income and strain the broader economy.
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