WASHINGTON (SBG) — COVID -19 has touched just about every aspect of life in this country, so it may come as no surprise that with millions of people losing their jobs as a result, it’s led to a dramatic decrease in the amount of payroll taxes being collected by the Social Security Administration.
Experts now say the projection of when full benefits may have to be cut back has been moved up a full year, from 2034 to 2033, as outlined in a report by the Social Security and Medicare Boards of Trustees.
At that point, the law says we can only pay in benefits what we raise in taxes which means a 22% across the board benefit cut," said Marc Goldwein, Senior Vice President of the Committee for a Responsible Federal Budget.
In an interview Monday, Goldwein added that concerns about insolvency for programs like Medicare and Social Security are no longer about saving for our grandkids. If you’re 62-years-old collecting benefits now, they could be cut when you turn 75.
If you were getting $20,000 a year now you’re going to get $16,000," Goldwein said. "It’s a pretty big reduction to happen so sharply and it and would happen to everyone.
This warning from the Social Security Board of Trustees was concerning by itself.
But a recent audit by the Office of Inspector General revealed the agency has been sending checks worth millions of dollars to thousands of dead people.
Over a 12 month period, the total reached $125.2 million.
A report summarizing the audit showed it initially found more than 3000 beneficiaries whose IDs matched that of a deceased individual in the CMS death data, and of those just 142 were found to be alive.
While the Social Security Administration has remedied much of that, the bigger picture needs a bigger fix — from Congress.
A bipartisan group said in 2019 changes should be made now. Senators Mitt Romney, Joe Manchin, and others proposed the formation of a rescue committee, part of what they called The Trust Act, to modernize the programs. Even back then, nearly two years ago, they urged immediate action.
The burden that will fall on our seniors eventually will become extraordinary and the burden that will fall on the next generation is they don’t know where their social security and Medicare can be depended upon is unthinkable," said Sen. Mitt Romney, R, Utah during a floor speech in October 2019.
Experts are now warning the cost of inaction is already higher than the cost of action.