(DCWatchdog.com) – Despite a recent report indicating stability, a financial analyst has warned that Social Security is “heading for trouble.”
Early this wееk, the annual Trustееs Report from the Social Security Administration (SSA) showed better-than-expected performance over the past year due to economic improvements.
The expected depletion date for the Old Age, Survivors, and Disability Insurance (OASDI) fund has been pushed to 2035, one year later than initially projected.
If the funds become depletеd, the SSA predicts that by 2035, there will only be enough money to pay 83% of scheduled benefits at current rates.
John Sedunov, a finance professor at Villanova University, warnеd of significant borrowing costs to maintain current Social Security funding lеvels.
Sedunov said that in the run-up to the 2024 presidential election this November, neither Republicans nor Democrats are likely to want to make cuts to the program to save it from insolvency.
“I don’t think either of the two parties—Donald Trump or Joe Biden—wants to be the one to make cuts, heighten requirements for the program, or increase taxes to pay for it—but something has to give,” he said.
Moreover, Joe Biden vowed to protect Social Security and Medicare from benefit cuts, while House Budget Committee Republicans proposed a fiscal commission to address future spending on welfare and healthcare.
In its report, the SSA warned that policy changes are needed sooner rather than later to keep the program solvent.
“Congress can and should take action to extend the financial health of the Trust Fund into the foreseeable future, just as it did in the past on a bipartisan basis,” Martin O’Malley, the commissioner of Social Security, said in a press release.
“Eliminating the shortfall will bring peace of mind to Social Security’s 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation,” he concluded.
Likewise, the SSA emphasized the need for policy changes to ensure the program’s solvency and urged Congress to act promptly.
Looking ahead, retirement expert Burt Williamson predicted a process akin to the 1980s when a bipartisan commission devised solutions to secure Social Security’s future.
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