The Social Security Old Age and Survivors Insurance fund, which pays out retirement benefits, is on track to run out in 2031 as the economic fallout from the COVID-19 pandemic takes its toll, according to a Wednesday report by the Congressional Budget Office.
Without congressional action to address the shortfalls, the depletion of the fund would lead to benefit cuts for retirees.
CBO projected that the OASI fund would drop from $2.8 trillion today to $533 billion in 2030, and run out the following year.
Though the retirement fund is the largest and most intently watched of the major government “trust funds” — which have dedicated revenues to fund specific benefits — three other major funds are also on track to run out.
The Highway Trust Fund will be depleted next year, Medicare’s Hospital Insurance Trust Fund will run out in the 2024 fiscal year and the Social Security fund for disability insurance will be empty by 2026.
The pandemic has wreaked havoc on the funds.
Whereas the previous estimate in January expected them to rise by a collective $57 billion this year, instead they are projected to lose a collective $43 billion, a $100 billion difference.
“The change in CBO’s estimate was largely driven by an increase in payments made by the Unemployment Trust Fund as the number of beneficiaries increased,” the report noted.
Congressional action is required to either raise more revenues for the funds, reroute general tax funds to fill them in or modify the benefit structures to avoid across-the-board cuts when the trust funds run out.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
