By Chris Adams
Social Security is more than just monthly checks for older Americans, and the entire system – for old, middle-aged and young alike – faces an uncertain future unless changes are made in coming years.
Kathleen Romig, a senior policy analyst at the Center on Budget and Policy Priorities, laid out the challenges to the system in a session with National Press Foundation fellows.
Romig, who previously worked at the Social Security Administration, described the old-age pension system most people think of when they hear “Social Security.” That system is highly progressive, so low earners get a much higher share of their working-career pay in monthly Social Security checks than do high earners. Even so, the overall benefit is relatively small, making it tough for people to live on only their Social Security benefits.
Beyond that, the Social Security system handles disability pay, survivors benefits for widows or widowers, and benefits for children whose parents have died.
That’s what the system does now. But what will it be able to do?
By 2034, under current projections, the Social Security system’s trust fund will be exhausted. That doesn’t mean it will be flat-broke, but it will need to trim benefits by about 25 percent to stay solvent. Those are numbers that come out yearly from the Social Security Administration.
There are levers Congress could pull to bring the system into long-term solvency. It could reduce benefits now, push back the age people can claim benefits, change the formula used for making annual cost-of-living adjustments, or increase the amount of income subject to Social Security taxes. None of those options are particularly attractive, at least to the politicians who would have to make them.