Social Security funds to last longer than expected thanks to sturdy economy

The consolidated trust fund for Social Security is projected to be depleted a year later than previously expected, the program’s fiscal and governing board announced Monday.

In its latest report, the Trustees project a depletion date for the Old Age and Survivors Insurance (OASI) Trust Fund, which pays Social Security benefits to retirees, and the program’s smaller Disability Insurance (DI) Trust Fund. is expected to occur in 2035.

Biden administration officials said the projected depletion date for the OASI trust fund has been pushed back to November 2033, seven months later than last year’s forecast, due in part to economic growth.

Officials said in a phone call with reporters ahead of the announcement that the governing board will increase the expected levels of labor productivity and gross domestic product (GDP) over the next few years after economic growth exceeded expectations last year. He said he pulled it up.

The official said the Trustees also lowered the assumed final disability rate and increased the final total fertility rate assumption from 2.0 children per woman. The company said it had revised it to 1.9, the lowest value assumed in the report.

However, the official said lower disability and birth rates were contributing to higher age employment rates and GDP.

Although both trust funds are separate, when discussing the program’s solvency, it is important to note that in the past it has relied on interfund borrowing between accounts to temporarily extend solvency, and these are consolidated. It has been considered as a fund.

Social Security Administration Secretary Martin O’Malley hailed the forecast as “good news for the millions of Americans who rely on Social Security,” adding that “a potential benefit reduction event will be It has been postponed.”

But he called on Congress to “take action” to extend the life of the program.

“Closing the shortfall will bring relief to more than 70 million Social Security beneficiaries, to the 180 million workers and their families who contribute to Social Security, and to the country as a whole,” he said. Stated.

Once the OASI Trust Fund reserves are depleted, the report predicts that account income will cover only 79% of beneficiaries’ scheduled benefits.

“It’s another year of inaction by lawmakers to protect this critical program that so many Americans depend on,” Jason Fichtner, chief economist at the Bipartisan Policy Center, said in a statement Monday. .

“Rather than protecting beneficiaries, this attitude leads us to automatic reductions in benefits of more than 20 per cent when the Old Age and Survivors Insurance Trust Fund is depleted, and the Trustees believe that this will happen over a 10-year period. “We expect it to happen as soon as 2033. Now is the time,” Fichtner said, adding that “only pragmatic bipartisan policymaking can stop these cuts.”