Finding reliable and unbiased information sources has become increasingly difficult in today’s political landscape. The overwhelming presence of partisan agendas and misleading narratives often makes it difficult to tell fact from fiction.
However, a few trusted, independent voices remain, one of which is the Congressional Budget Office (CBO), a nonpartisan organization that provides critical economic data and analysis to both parties in Congress. The CBO’s mission is straightforward but important: to provide an objective, fact-based analysis of the government’s finances.
Molly Dahl, chief of long-term analysis at the CBO, recently testified before the Senate Budget Committee. Dahl’s testimony contained a stark warning about the future of Social Security. According to her, unless lawmakers intervene, the Social Security trust fund will be depleted by fiscal year 2033.
To clarify, fiscal years in the federal government begin on October 1 of the previous calendar year, so this forecast indicates that the fund will run out by late 2032 or early 2033—just over eight years from now.
Dahl’s testimony did not end there. She went on to say that even if the government were to temporarily redirect funds from the federal Disability Insurance trust fund, it would only delay the inevitable depletion by about a year.
Combining the two funds would push the exhaustion date to fiscal year 2034, giving lawmakers only one more year to act. But, regardless, the unavoidable reality remains: if no legislative action is taken, Social Security benefits will be reduced by approximately 25% beginning in 2034.
If they are able to combine the trust funds, the cuts, while slightly less severe, will still amount to approximately 23% by 2035.
It is important to note that these reductions would not necessarily be based on current benefit levels, but rather on projected higher benefits in 2034 or 2035, which are expected to rise due to overall economic wage growth. Nonetheless, these cuts would pose a significant challenge for millions of retirees, many of whom rely on Social Security as their primary source of income.
Other worrisome aspects than Social Security
This looming Social Security crisis is only one part of a larger, more troubling financial picture. The fiscal challenges facing the United States go far beyond retirement benefits. Medicare is another major concern.
Dahl’s warning about Social Security echoes concerns about Medicare’s financial health, particularly Parts A, B, C, and D. According to the Medicare trustees’ annual report, the combined unfunded liabilities of Social Security and Medicare total more than $78 trillion, or nearly 280% of the nation’s GDP.
The national debt is another concerning aspect of the country’s overall financial problems. The United States government currently owes approximately $28 trillion, which is equal to the nation’s entire GDP for the first time since the post-World War II era. This debt is rapidly growing.
Despite low unemployment and economic growth, the federal government borrows $1 trillion every 6 months. The CBO predicts that if this borrowing continues unchecked, the national debt will reach $50 trillion within the next decade.
This is all taking place in an environment in which tax cuts are still being promised, particularly for the wealthiest Americans. One prominent political figure has proposed lowering taxes for those earning more than $400,000 per year, which appears contradictory given the country’s dire financial situation.
At some point, the harsh reality will have to be confronted: either spending must be significantly reduced, taxes must be raised, or both. The numbers simply do not add up if things continue as they are. The federal government cannot continue to increase its debt while ignoring the long-term solvency of key social safety nets such as Social Security and Medicare.
Also See:- $2,000 Social Security payment due tomorrow Feb. 12 — if you are on the following list
