Social Security is a programme administered by the federal Government which facilitates peoples’ access to pension benefits and disability income. Both Democrat and Republican politicians have been voicing concerns over the long-term viability of the programme with Joe Biden being called to take action.
US Senator Bill Cassidy, M.D. (R-LA) has issued a warning to the White House that Social Security is at risk of “going broke” unless action is taken.
Dr Cassidy explained: “The President needs to show leadership by engaging with Democrats and Republicans.
“Social Security is going broke a year sooner than we thought. Choosing to do nothing guarantees a 24 percent cut in Social Security for all current and future retirees.
“While Biden’s inflation has sped up the insolvency timeline, the greatest threat to Social Security remains politicians who choose to do nothing.”
This comes after the annual report from the Trustees of the Social Security and Medicare trust funds.
The report looked into how much longer Social Security programs will be able to operate without the Government being forced to make serious cuts to benefits.
It forecasts that the Social Security Trust Fund will become insolvent in 2033 with the Medicare Trust Fund reaching insolvency two years earlier.
As a result of this, trust funds will not have enough money to pay the American taxpayer the full benefits they have paid into.
Currently, those in receipt of Social Security will be dealt a 24 percent cut to their benefit payments if the Trust Fund were to go insolvent.
For context, this would include Americans claiming Social Security checks and anyone who will receive payments in the future.
Dr Cassidy, alongside Senator Angus King (I-ME), is fronting a working bi-partisan group of politicians looking to protect Social Security.
Recently, he scrutinised Treasury Secretary Janet Yellen on the Biden administration’s failure to plan ahead when it comes to Social Security payments.
During a Senate Finance hearing, Di Cassidy urged Biden to stand by his promise to protect the programme and invited him to speak to senators about options.
Last month, the Congressional Budget Office (CBO) forecast that Social Security would be in deep financial trouble by 2032.
The CBO revealed that spending on Social Security and Medicare would be significantly outpacing federal tax revenues.
As a result of this, the risk of Social Security falling into insolvency by 2023 is being exacerbated.
Earlier this month, Senators Cassidy and King said: “Addressing this existential threat is a complicated math challenge and we are hearing out all possible pieces of that equation — like Ronald Reagan and Tip O’Neill did in 1983 — and leaning on a proven financial model to do so.
“Though there have been some incomplete and somewhat alarmist reports published, it’s important to look at all the components of a solution together, especially in the context of the crisis we face if nothing is done.
“There are dozens of considerations being weighed to protect Social Security, including locking early retirement at 62, ironclad protection for lower-wage workers, and seeking avenues to increase benefits immediately.
“Under what we are discussing, millions would immediately receive more, and no one would receive less.”