Millions of Americans are at risk of losing big bucks.
Social Security — the federal program providing monthly payments to eligible Americans — is in jeopardy of running out of cash by 2032. Over 71 million people rely on these benefits as the payments replace income when folks retire, become disabled or lose a spouse.
The Social Security Administration (SSA) said in a statement that after 2032, the fund will only be able to dole out 78% of total scheduled benefits. This means recipients are at risk of losing an average of about $500 a month.
“This train wreck is going to happen,” Rep. Steve Womack (R-Ark.) said in an interview with Politico. “So as early as six years from now, we’re going to have to have a plan. And of course, I’m a big believer that we need to deal with it now, or we need to start the process of dealing with it now.”
If nothing no legislation is passed, Social Security funds will be wipes out by 2032 Monkey Business – stock.adobe.com
As fear grows, Capitol Hill has seen a flood of lawmakers introduce bills aimed at addressing Social Security’s long-term solvency, but none have been passed.
In July, the Promise Act — bipartisan legislation from eight senators — would create a process for Congress to develop a plan to keep Social Security solvent for at least 50 years.
“I won’t pretend there’s consensus on how we solve this, but the math is unforgiving: the longer Congress waits to act, the fewer good options remain, which is why I am proud to support this legislation,” Senator Thom Tillis, who co-sponsored the bill, said.
Just before that, the Bipartisan Social Security Commission Act was introduced in June by two representatives which would also establish a committee to develop solutions.
The Social Security 2100 Act was also introduced back in June and would increase benefits while shoring up Social Security’s finances by making higher-income Americans pay more into the system.
According to the bill — which was first introduced back in 2017 — all current and new beneficiaries would see a 2% benefit increase, it would change how COLA is calculated and make other switches to benefit structure.
Social Security recipients are at risk of losing an average of about $500 a month zinkevych – stock.adobe.com
The new minimum benefit would change to 125% of the Federal poverty line, and switch the COLA calculation to the CPI for the Elderly (CPI-E).
The CPI-W currently calculates Social Security COLAs. It tracks the spending of working-age people — specifically wage and clerical workers. But it also tracks the cost of food, housing, energy, transportation and healthcare.
Meanwhile, the CPI-E is another measure for folks 62 and older, offering more information on expenses that directly impact seniors. Some advocates believe that this change would be more beneficial to Social Security recipients as it’s a “senior-focused” inflation measure instead of “working-person-focused.”
However, The Senior Citizens League (TSCL) — a non-partisan advocacy group that makes very accurate COLA projections — fear the chance of the bill passing is slim to none.
“Although the Social Security 2100 Act is unlikely to pass in the current Congress, it should. The bill is the gold standard for Social Security reform and accomplishes the majority of changes older Americans want to see for the program,” TSCL Executive Director Shannon Benton said.
