The Countdown
Our major federal trust funds are approaching insolvency.
What are the Social Security Trust Funds?
Social Security has two trust funds that finance its different social insurance functions. The Old-Age and Survivors Insurance (OASI) trust fund pays monthly benefits to retired workers, their families, and some survivors of deceased workers. Workers can begin collecting retirement benefits between ages 62 and 70, though the full retirement age is 67.
Social Security’s Disability Insurance (SSDI) trust fund pays monthly benefits to workers with disabilities that prevent them from remaining in the workforce.
Both programs are funded through a 12.4 percent payroll tax, split between worker and employer, up to a maximum amount of wages. 10.6 percentage points go to the OASI trust fund and 1.8 percent to the SSDI trust fund.
Why are they in trouble?
The population is aging, people are living longer, and birth rates are at an all-time low. Thus, the population in retirement receiving benefits is growing while there are less people working and paying taxes to support those benefits.
What can we do to fix Social Security?
We need to slow Social Security’s cost growth, increase revenues, or do some combination of both. Reforms could not only prevent steep benefit cuts but could also boost retirement income for those in need, promote work and investment, and reduce inequities in the program. Solutions put forth through the McCrery-Pomeroy SSDI Solutions Initiative could help restore solvency to Social Security’s Disability Insurance program.
Get Into the Weeds
Ten Options to Secure the Social Security Trust Fund
We highlight ten possible options to improve the financial status of the Social Security trust fund by increasing taxes, broadening the payroll tax base, changing how benefits are calculated, and raising the retirement age. These options are meant to serve as illustrative examples and are just a few of the many available options to prevent insolvency.
A Deeper Dive
Lawmakers Add $380 Billion to the Debt in the Final Hours of 2024
With the passage of the Social Security Fairness Act and the American Relief Act, Congress and the President approved $1 trillion in new ten-year debt...
Senate Will Soon Vote on Speeding Up Social Security Insolvency
Senate Majority Leader Chuck Schumer (D-NY) announced yesterday that the Senate would vote on the Social Security Fairness Act, which passed the House...
Typical Couple Will Lose $25,000 of Social Security from WEP/GPO Repeal
Lawmakers are considering the repeal of Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Not only would...
What Can I Do?
Reach Out to Congress
We need Congress to fix these tough issues before our seniors, our economy, and future generations are in jeopardy. Find your representative and share your concerns.