The Congressional Budget Office or CBO, has put out a warning that Social Security is projected to run out of money within 10 years and that Congress needs to come up with a fix before this happens. CBO estimates that Social Security costs are already exceeding the amount of money that the program is bringing in, and the program is quickly running out of cash.
The CBO says that even if the program is left untouched with no spending cuts, it will still run out of money. If the gap between the trust funds’ outlays and income occurs as the CBO projects, then
the balance in the trust funds will decline to zero in 2033 and the Social Security Administration will
no longer be able to pay full benefits when they are due. The projections come from a 10-year budget projection.
Social Security is the largest single program in the federal budget, and it is financed through payroll and income taxes. The CBO predicts spending for Social Security will increase rapidly over the next decade as the large baby-boomer generation retires. Spending will also continue to increase due to life expectancy increasing. Over the coming years, lower fertility rates are also projected, resulting in lower birth rates in the future, which means fewer working-age people to pay into Social Security taxes.
The CBO has suggestions to fix the program, including raising payroll taxes to bring in more money for the program or raising the retirement age to 70 years old. Speaker of the House Kevin McCarthy says he is not making any cuts to Social Security, but something will need to be done to keep it from running out of funds. Hopefully, Congress doesn't put the issue on the back burner and fixes the problem sooner rather than later.
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