A new Congressional Budget Office (CBO) study predicts that spending on Social Security payments will exceed the fund’s revenues by 2033. This is often referred to as “fatigue.”
That means that it will be necessary to find some form of revenue that exceeds spending or Social Security payments will begin to decline. Since this is the only source of income for millions of Americans, the impact on society as a whole could be catastrophic.
Social Security spending could exceed income
As reported by the DiarioNY, the new study is titled “CBO’s Long-Term Projections of Social Security to 2022” and its main conclusion is: “In CBO’s projections, Social Security spending will exceed program revenues in 2022 and increase as a percentage of GDP over the next 75 years. while keeping revenues flat. Combined, the program’s trust funds will be exhausted by 2033.”
The scenario is worse for people who will not retire for many years. If Social Security is underfunded, benefits for those in the system will be 23% lower in 2033 than they are today; however, for those receiving 2096 benefits, they will be 35% smaller.
One possible solution is to legislate to increase the amount of money currently working people pay into Social Security. However, this is unpopular with most members of Congress because it is essentially a tax increase.