- Summarize the key points of the article Social Security Reserves Expected to Be Depleted in 2035, Year Later Than Prior Projection
- What are possible corrections to the problems? To answer this question, you may read the second article One Small Step for Social Security
found in the same document. Or do some searches at google.com or yahoo.com, etc.
- Explain, if possible, why the holdup in making any corrections.
Social Security Reserves Expected to Be Depleted in 2035, Year Later Than Prior Projection
Economic growth bolstered trust fund, pushing out date for when benefits could be diminished
Updated June 2, 2022 4:19 pm ET
WASHINGTON??The rapid economic recovery from the brief recession caused by the Covid-19 pandemic has helped bolster the finances of Social Security, though the program still faces stark long-term challenges, the latest government projection found.
In an annual report released Thursday, trustees for the Social Security Trust Funds said they anticipate that the program??s combined reserves will be depleted in 2035,
one year later than projected last year. Stronger-than-expected economic growth since last year has generated more in payroll taxes, which provide much of the funding for Social Security. People are also seeking the program??s disability payments at a lower rate.
Once Social Security??s reserves run out, revenue will pay for roughly 80% of scheduled benefits, according to the report, unless Congress steps in. Social Security??s cost exceeded its income in 2021, a pattern that the trustees expect in all future years.
Social security benefits are adjusted for inflation, and the trustees wrote in their report that they expect payments to increase 3.8% next year due to inflation. But since making that projection in mid-February, administration officials now say they expect the cost-of-living adjustment to be roughly 8% as inflationary pressures persist.
Annual inflation has been trending above 8% in recent months, near a four-decade high, according to the Labor Department??s consumer-price index.
The administration officials said that higher payroll-tax revenue from rising wages and labor growth is keeping up with the higher costs, though, meaning that inflation is having a largely neutral impact on the program??s finances.
Social Security consists of two programs, one for retirees and the other for people who claim disability benefits. The retirement program??s trust fund alone is projected to last until 2034, while the disability program??s trust fund is now forecast to cover benefits through the 75-year projection window in 2096. Last year??s report estimated the disability fund would run out in 2057.
A parallel report on Medicare similarly showed projections for the program??s finances improving. Reserves for Medicare??s hospital insurance fund are now forecast to run out in 2028, two years later than previously projected,
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