You can add another victim to the Covid-19 pandemic: the Social Security trust funds. In case you don’t know, Social Security funds its programs through payroll deductions. The taxes collected this way are supposed to go into a trust fund that pays benefits to Social Security recipients. The trust funds do not exist, as a practical matter. The government spends Social Security taxes as soon as they come in.
No Trust In The Trust Funds
Had the government really taken the Social Security taxes and set them aside, all of the Social Security programs, including disability, would likely have been set in perpetuity. But, asking politicians to not spend tax money is just too much. The Social Security trust funds, therefore, have various dates at which they will run out of money. When that happens, Social Security will be unable to pay all that they owe to beneficiaries.
A New Report Suggests A Scary Future
Before the pandemic, Social Security estimated that they would be able to pay full benefits through 2035. Social Security believed they could cover disability benefits through 2065. But, a new report from the Social Security Trustees warns that these estimates may be too optimistic. If the pandemic forces workers off of payrolls for an extended period, the resulting drop in Social Security taxes could devastate the trust fund.
Go Broke 18 Months From Now?
Per the Social Security trustees, if Covid-19 kicks off a long and sustained recession, Social Security would be unable to pay full retirement benefits as of 2029. The effect on Social Security disability is even direr. That program could run out of money by 2022. Yes, 18 months from now.
Congress To The Rescue? Now, That’s Funny
Unfortunately, the solution to Social Security going broke must come from the most partisan and dysfunctional Congress in recent memory. These people can’t agree on naming Post Offices, but they must somehow fix Social Security’s imperiled funding. I suspect they will get it done, but only at the very last minute and in the worst possible way.
Vote For Your Future
Keep this in mind as you prepare to vote this fall. You can contemplate, for example, how the trillions of dollars the Trump administration gave away to the rich with their tax cuts could have ensured that the old and disabled in this country continued to receive their benefits.
