The Social Security system faces an uncertain future as a new report released by the Board of Trustees of the Old Age and Survivors Insurance (OASI) Trust Fund shows that the Trust Fund's reserves could be depleted as early as 2033. This marks the first time in decades that the projected OASI Depletion date is within a 10-year window. In response, lawmakers are being urged to prioritize American seniors by working in a bipartisan fashion to strengthen and save the Social Security and Medicare programs.
The trustees have recommended that necessary changes be gradually phased in to give workers and beneficiaries time to adjust to them. To ensure the long-term solvency of Social Security, President Biden has proposed extending the life of Medicare's Hospital Insurance Fund to the 2050s. This plan includes proposals to reduce costs for beneficiaries and to impose a higher tax rate on high earners. Meanwhile, Senate Republicans have been divided on tackling Medicare Advantage overpayments to insurance companies.
Roughly 66 million people receive Social Security benefits in 2022, with 57 million people receiving benefits from the OASI Trust Fund and nearly 9 million people receiving benefits from the Disability Insurance Trust Fund (DI). The DI Trust Fund is expected to remain solvent for at least 75 years, while the OASI Trust Fund could cover 100 percent of the total scheduled benefits until 2034. However, if both funds become depleted, the government would only be able to cover 80 percent of the scheduled benefits.
The Social Security Trustees Report of 2021 serves as a warning that lawmakers must take action to ensure long-term sustainability of the system. Action taken now can prevent drastic cuts in benefits and give workers and beneficiaries time to adjust to changes.