Social Security Depletion: Discover Solutions From Opposing Sides of the Issue

Social Security cards and assorted cash.
zimmytws / Getty Images/iStockphoto

According to the 2021 annual report of the Social Security Board of Trustees, the trust funds that distribute retirement, disability and other Social Security benefits will be depleted by 2034

See: 5 Social Security Benefits You Can Claim Online
Find: 6 Reasons You Won’t Get Social Security

While this doesn’t mean that Social Security benefits will no longer be paid out, it means the cash reserves will be depleted and that Social Security will only be able to pay out what’s paid in Social Security taxes each year.  

If this happens, Social Security will only be able to pay 78% of the benefits to which retired and disabled workers are entitled. This has sparked debate between lawmakers over the appropriate course of action to fix Social Security’s finances.

Rep. John Larson (D-Conn.), Chairman of the House Ways and Means Social Security Subcommittee, has authored “Social Security 2100: A Sacred Trust” to help boost benefits and strengthen the Social Security program. The proposal has bipartisan support among Americans and more than 200 co-sponsors in Congress, according to Larson.

Retire Comfortably

“The urgency to act on Social Security is clear. The elderly are not only the most susceptible to this pandemic; since they are on fixed incomes, they are also the most susceptible to inflation. They need help and they need it now,” Larson wrote in a letter to the Wall Street Journal.

This bill would also apply the payroll tax to wages above $400,000 so the wealthy pay the same rate as someone earning $50,000 per year. Significant contributions toward the Social Security program’s solvency would also be made, which he claims will make up more than half the shortfall in the Social Security Trust Funds.

On the other hand, Sen. Rick Scott (R-Fla.), the head of the National Republican Senatorial Committee, has released an 11-point plan proposing a 10-year tax increase of more than $1 trillion on “more than half of Americans,” to make sure every household pays taxes, the Washington Post reported.

“The change we need is to require those who are able-bodied but won’t work to pay a small amount so we’re all in this together,” Scott explains in a letter to the Wall Street Journal.

Retire Comfortably

See: 15 Worst States To Live on Just a Social Security Check
Find: The Average Social Security Check the Year You Were Born

Scott’s agenda also plans to sunset all federal legislation, which includes Social Security and Medicare, in 5 years. “If a law is worth keeping, Congress can pass it again,” he claims in his Rescue America plan.

More From GOBankingRates

About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

Best Bank Accounts of June 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.