Senate

Risk of shortfall raises stakes in Social Security fight

A new budget report pulling the insolvency date for Social Security to within a decade is prompting fresh unease among senators and a greater urgency to act.

In its latest outlook report, the Congressional Budget Office (CBO) projected that the Old-Age and Survivors Insurance trust fund, which pays out retirement and survivors’ benefits, would be exhausted in 2032.

Experts say the recent projection from the nonpartisan budget scorekeeper brings the insolvency date within the nation’s 10-year budget window for the first time in decades.

Senate Majority Whip Dick Durbin (D-Ill.) on Thursday expressed concern about the development, telling The Hill it raises the stakes for Congress to act sooner on shoring up solvency for the program.

Sen. Tim Kaine (D-Va.) also said he thinks the annual report provides a “push” to ongoing talks around possible fixes, though he’s not raising his hopes just yet.

“I don’t know that I’m predicting success on this in the next few months, but there are good discussions going on,” he said, adding that he’s involved in bipartisan talks looking at the program’s funding issues.

Lawmakers have long been wary about touching Social Security. There has been little visible unity on Capitol Hill on the issue, beyond promises from both parties to not touch the entitlement program.

As public attention around the program’s funds has risen in recent weeks, so too has a partisan feud begun to heat up over entitlements on Capitol Hill as both sides clash over how to address the nation’s debt limit.

“We’re in an environment today where anyone who talks about saving Social Security and Medicare is going to be accused of wanting to cut it,” Sen. Marco Rubio (R-Fla.) told The Hill on Thursday.

The White House and other Democrats hammered Republicans for vowing to not raise the roughly $31.4 trillion limit without fiscal reform. The attacks have particularly focused on previous proposals — panned as nonstarters — that some GOP members floated as possible changes to the entitlements, including tightening eligibility requirements.

At the same time, Republican leaders have sought to quell concerns about reforms to the popular program. They’ve ruled out proposals to link the debt limit fight to entitlement reforms and instead shifted their attention to discretionary funding hashed out by Congress every year. 

But there is still appetite among Republicans to tackle the insolvency issue facing Social Security, which led the Treasury Department’s list of top 10 categories for federal spending in fiscal 2022.

“The real drivers here are [that] we have an aging population that’s retiring very rapidly and living a lot longer than any other generation before it. … It’s not fiscally sustainable right now. To me, that’s the underlying problem,” said Rep. Tom Cole (R-Okla.), chairman of the House Rules Committee, who has also proposed a commission to find possible fixes.

Recent figures from the CBO estimated a sharp rise in funding for Social Security over the next 10 years. Experts say Congress is losing time to make less painful changes to ensure eligible recipients will still be able to receive their full benefits in the coming years.

“We’ve actually known about the need to make reforms for decades, plural,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in an interview. “And every year that we’ve waited means that those ultimate spending reductions and tax increases are going to have to be larger and more painful, hitting people who can afford them less because we waited.”

Richard Johnson, a senior fellow for the Income and Benefits Policy Center at the Urban Institute, also warned Congress risks having to impose more “dramatic” fixes to help protect the program’s solvency if it waits “until it becomes a real crisis.”

“Let’s say we increased taxes 20 years ago, then all that money would be going into the trust fund, and that would have shored up Social Security,” he said. “Now, you know, we’ve lost those 20 years of increased revenues, and so now to make up the difference, we will be able to contribute more.”

But despite ongoing bipartisan talks, many Republicans and Democrats have been far apart in some proposals offered in recent months, with the parties often divided over whether to focus on adjustments to the tax side that pay into the program or drawing down in benefits. 

“Eventually, we’re gonna have to address it,” Sen. Tommy Tuberville (R-Ala.) told The Hill on Thursday, but he also doubted the chances of seeing the current Congress take on the insolvency threat.

Sen. Markwayne Mullin (R-Okla.), who was elected last year, shared a similar outlook in remarks on Thursday, suggesting Congress is more likely to “wait until the deadline” than act sooner, while also forecasting the impact the coming presidential cycle could have on the political climate.

In addition to Democrats pouncing on the issue in recent months, former President Trump, who is again vying for the Oval Office, has also put pressure on Republicans to avoid touching entitlements, while additionally hitting at GOP competitors for proposed cuts.

“You got two years here that you’re going to have a presidential election,” Mullin said. “And I imagine this will be brought up, because it always is.”

“And anytime it’s politicized, there isn’t going to be a solution,” he said, adding: “I’d hoped we’d set political differences aside and just find a solution to it, but we’ll probably wait until 2031 to actually get serious about fixing it.”