CBO Director Phillip Swagel said that once Social Security's trust fund becomes exhausted in 2032, benefits would automatically be cut by 25% unless Congress acts.
Social Security faces a $250 billion hole to maintain benefits for the next decade, which rises to $8 trillion the following decade.for Social Security reforms included policy options to mitigate the impact on Americans who are close to retirement age and may begin receiving benefits soon and give those who will be affected more time to plan.
He emphasized that "the longer you wait to make the adjustments, well, the more difficult the problem becomes, the more costly and more wrenching are the eventual adjustments."In 1950, Social Security had 16 workers for every beneficiary – but that ratio has narrowed to 2.8 workers for every beneficiary as of 2022 and is expected to shrink further to 2.3 by 2035.
"That’s really the message of what our report says, that the current path is not sustainable, the odds that we’re going to have no problems on the fiscal side are just vanishingly small, they’re zero – so action must be taken," Swagel said. Cavuto noted that at one point early in its existence, Social Security had 16 people paying in for every recipient and that the math is getting closer to 1-to-1. Indeed, data from the Social Security Administration indicates that in 1950 the ratio was 16.5 workers for every beneficiary before it declined to around 3.3 workers per beneficiary where it remained from the 1970s until 2010 when it dipped to 2.9. As of 2022, SSA estimated there were 2.
"That’s the challenge we face: We have demographic change. We’re getting older as a society and that affects Social Security and Medicare," Swagel explained. "And then healthcare costs are growing faster than the economy, faster than the price of other things. And with an aging society, we’re going to need more healthcare, more healthcare spending. And so that is driving our fiscal imbalance, along with higher interest.
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