Social Security, the nation's largest retirement program, turned 90 this week but is anticipated to face the threat of insolvency by 2032, a crisis that could slash benefits by nearly a quarter and deepen partisan divisions over how to preserve the program.
Seven Years From Insolvency
Committee for a Responsible Federal Budget in a report on Thursday cited the new estimates from the program's Chief Actuary, saying Social Security's retirement trust fund will run dry in just seven years, forcing automatic benefit cuts of 24% if Congress fails to act.
A typical couple retiring after the insolvency date would lose about $18,400 per year in benefits.
These projections show that time is running out, the report said, adding that the lawmakers must take action now to prevent devastating cuts for retirees.
The insolvency date had previously been projected at 2033 but was accelerated to late 2032, partly due to two new pieces of legislation. On a combined basis, including disability trust funds, reserves would last only until 2034.
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One Big Beautiful Bill And Other Laws Deepen The Shortfall
Two new laws have worsened the program's financial outlook. The One Big Beautiful Bill Act reduced tax revenue from Social Security benefits, costing the trust fund an estimated $169 billion over 10 years, the report said.
Meanwhile, the Social Security Fairness Act expanded eligibility for certain government workers, widening the shortfall by another $200 billion.
As a result, Social Security's long-term financing gap has grown to nearly 4% of taxable payroll, up from 3.5% just last year.
Trump Promises Protection, Critics Push Back
Marking the anniversary, President Donald Trump vowed to protect and strengthen Social Security, highlighting OBBBA as "the largest tax break for seniors in the history of our country."
He also announced new anti-fraud initiatives, including halting payments to deceased individuals and denying benefits to those who don't legally qualify.
"These measures will save American taxpayers billions of dollars every year," Trump said in a proclamation, tying strong immigration enforcement to the preservation of Medicare and Social Security.
But critics accused Trump of undermining the program. Sen. Bernie Sanders (I-Vt) said Trump cut more than 7,000 Social Security Administration jobs, closed field offices and made it harder for seniors and disabled Americans to receive benefits. He called for higher taxes on billionaires to expand benefits and extend solvency.
Sen. Elizabeth Warren (D-Mass) told Trump to "Get your hands off our checks."
Warnings From Wall Street Mogul Warren Buffett
In 2005, during the Berkshire Hathaway annual meeting, billionaire investor Warren Buffett also weighed in, warning that retirees could face devastating reductions if lawmakers fail to act. Benefits should not fall below current levels, he said, urging immediate tax or benefit adjustments to safeguard seniors.
Unless Congress acts, cuts will hit all retirees beginning in 2032, when today's 60-year-olds reach retirement age. While solutions exist -- from raising taxes to restructuring benefits -- the challenge is political will, according to CRFB.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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