A new analysis from the Bipartisan Policy Center shows how much the current downturn caused by the coronavirus could hit Social Security.
The 2020 Social Security and Medicare trustees report, published Wednesday, showed that Social Security could pay full scheduled benefits until 2035, and that the Medicare's Hospital Insurance Trust Fund would be depleted earlier, in 2026.
The analysis found that if the economic fallout from the pandemic is similar to the 2007-09 recession, the program’s two trust funds could be depleted much earlier: in the “coming decade.” Social Security is made up of two funds: there is an Old-Age and Survivor Insurance trust fund and a Disability Insurance fund. The BPC estimates that the old-age fund’s “depletion date” would move up from 2034 to 2029.
U.S. officials also told Reuters on Wednesday that revenue losses from the coronavirus would likely accelerate the depletion of Social Security reserves. The Committee for a Responsible Federal Budget also released an analysis of the Trustees' Report and they note that “Social Security Disability Insurance is likely to be insolvent decades earlier than the Trustees project – perhaps in the 2020s – and the old age program several years earlier than projected.
As the BPC post notes, the current crisis could increase costs as well. When workers lose their jobs, the claims for Social Security Disability Insurance could rise and more older workers could also retire and begin to claim benefits. A range of politicians – including bipartisan leaders from both the Senate Finance Committee and the House Ways and Means committee – released statements saying that the report underscored the need for Congress to act to shore up the program for future generations.
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