The following is from the 2005 Social Security Trustees Report:
Annual cost will begin to exceed tax income in 2017 for the combined OASDI Trust Funds, which are projected to become insolvent (i.e., unable to pay scheduled benefits in full on a timely basis) when assets are exhausted in 2041 under the long-range intermediate assumptions.
For the trust funds to remain solvent throughout the 75-year projection period, the combined payroll tax rate could be increased during the period in a manner equivalent to an immediate and permanent increase of 1.92 percentage points, benefits could be reduced during the period in a manner equivalent to an immediate and permanent reduction of 12.8 percent, general revenue transfers equivalent to $4.0 trillion (in present value) could be made during the period, or some combination of approaches could be adopted. Significantly larger changes would be required to maintain solvency beyond 75 years.
The projected trust fund deficits should be addressed in a timely way to allow for a gradual phasing in of the necessary changes and to provide advance notice to workers. The sooner adjustments are made the smaller and less abrupt they will have to be. Social Security plays a critical role in the lives of 48 million beneficiaries, and 159 million covered workers and their families. With informed discussion, creative thinking, and timely legislative action, we will ensure that Social Security continues to protect future generations.
A couple of things have changed since this was written. Things have gotten worse. For one the annual cost exceeded incoming taxes in 2010, instead of 2017. Also, the insolvency date is now 2035 rather than 2041 and the needed additional tax is no longer 1.92%, it’s 2.62%.
Each of the succeeding Reports, including the latest report say essentially the same thing and all urge action sooner rather than later. Keep in mind, the Trustees are predominantly members of the then current administration, including the Secretary of the Treasury, of HHS and Labor.
This problem should have been addressed before the Obama administration; it was not. Early in the Obama administration he formed a bi-partisan task force; the National Commission on Fiscal Responsibility and Reform. Their report called for several changes in Social Security. Several key Democrats called for further bi-partisan discussion of the ideas. As usual the far left opposed it all on the basis changes would harm Social Security. Obama ignored it all and for eight years the fiscal condition of Social Security was allowed to deteriorate and still is.
Why blame Obama? Only because he formed the Commission and then ignored it, he had the best opportunity during his first two years with full control of congress and his popularity would have allowed him to use the bully pulpit to force change and educate people and instead he barely mentioned the problem.
Now fixing Social Security will be much harder politically and fiscally. Democrats will oppose anything Trump proposes simply because it’s Trump. In addition, apparently addressing Social Security is lower on the list than health care and tax reform and to complicate matters the left is calling for adding benefits to the program.
There is a place to start, it’s this plan you can find here https://quinnscommentary.com/2017/04/11/what-you-need-to-know-about-the-social-security-2100-act/
Let’s hope Republicans in their first two years don’t blow another chance (he said in jest).🤗