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Three Key Moments from Social Security Subcommittee Hearing on Trust Funds in 2024 and Beyond

June 06, 2024

Biden’s proposed budget would cut $17 billion from Social Security revenue. 

WASHINGTON, D.C. – Social Security’s finances are on an unsustainable path, warned the Social Security chief actuary and director of the Congressional Budget Office at a recent Ways and Means Social Security Subcommittee hearing. When the Old-Age and Survivors Insurance (OASI) Trust Fund is totally exhausted as is expected to occur in 2033, seniors will face at least a 20 percent cut in benefits unless congress steps in and takes action to protect retirees. Meanwhile, President Biden’s proposed budget for Fiscal Year 2025 would further weaken the program and put hard-earned benefits in jeopardy with a $17 billion cut in revenue to Social Security Trust Funds. 

Social Security Finances On Unsustainable Path

The Biden Administration is doing nothing to pull back from Social Security’s unsustainable financial path. In his opening statement, Social Security Subcommittee Chairman Drew Ferguson (GA-03) laid out that Social Security spending will continue to grow as a percentage of the nation’s economic output. Instead of offering a plan, the Biden Administration has weakened the program’s finances. On top of proposing a budget that would result in a $17 billion cut in program revenue over the next decade, in just the past six months, the Biden Administration through executive action and rulemaking has unilaterally added $24 billion of unpaid for new costs to the program.

Rep. Ferguson: “It is clear that Social Security’s cost growth is unsustainable. Program costs averaged 4.5 percent of GDP from 1994-2023 and are projected to grow rapidly to nearly 6 percent by 2034 as Baby Boomers continue to reach retirement age. Simply put, more people are, and will be, collecting Social Security, for longer periods of time and we are looking at a situation where we have fewer workers. This trend is projected to continue for decades.”

“To add insult to injury, President Biden’s recent budget does nothing to address the pending exhaustion of the retirement Trust Fund. To make matters worse, the cumulative effect of the President’s budget proposals would actually hurt Social Security’s funding stream by billions of dollars.”

“On top of that, his Social Security Administration has done everything it can to push out rules and other policy changes that will result in tens of billions of dollars of new and unpaid-for program costs that will only accelerate Trust Fund exhaustion.”

“Social Security is vitally important part of every single American’s life and retirement so it’s important that we don’t downplay how bad the situation really is.”

Biden’s Budget Would Cut $17 Billion From Social Security 

President Biden and Democrats often try and accuse Republicans of cutting Social Security, but the President’s most recent proposed budget shows the reverse is true: it’s President Biden with the plan to undermine Social Security. His own budget demonstrates how his failed policies would lead to a $17 billion cut in revenue to Social Security, which only contributes further to the exhaustion of the Social Security OASI Trust Fund. Rep. Mike Carey (OH-15) drew the connection to how seniors will be hurt by the Biden Budget, including seniors like his own grandparents who entirely relied on Social Security for their income. 

Rep. Carey: “Unfortunately, if my numbers are correct, under this budget, if enacted, the administration’s budget would cut approximately $17 billion to the Social Security Trust Fund over the next decade. I’m the grandson of a couple that lived only on Social Security. And I watched how they scrimped and saved and tried to do what they could.

Seniors Staring Down an Over 20 Percent Cut in Benefits

When Social Security’s OASI Trust Fund becomes exhausted, currently projected to occur in 2033, the program will no longer be able to pay the full benefits seniors were promised for their retirement, absent any change by Congress. During questioning by Rep. Randy Feenstra (IA-04), Congressional Budget Office (CBO) Director Phillip Swagel shared his agency’s forecast of a 21 percent cut in benefits. Estimates from both CBO and the Social Security Trustees show that seniors would see a significant cut in their Social Security benefits that could derail and delay retirement.

Rep. Feenstra: “Dr. Swagel, what is going to be the percentage cut per Social Security recipient right now at 2033?

Dr. Philip Swagel, CBO Director: “21 percent.

Rep. Feenstra: “I just want to make sure we’re fair here. You’re telling the public that they’re going to see a 21 percent cut in their Social Security if we do nothing?” 

Dr. Philip Swagel, CBO Director: “That’s correct.”