WASHINGTON, DC – At a Social Security Subcommittee hearing to establish a fact-based foundation and understanding about the imbalance in Social Security’s finances, Ways and Means members and witnesses discussed the need for bipartisan cooperation to save and strengthen the program so that its retirement Trust Fund can be protected against looming financial challenges in the next 10 years. The most recent Social Security Trustees Report projects that the retirement Trust Fund will reach insolvency one year earlier than last year’s projection.
A Commitment to Saving and Strengthening Social Security
Congress must be committed to preserving Social Security for today’s seniors and tomorrow’s retirees. Ways and Means Committee Chairman Jason Smith (MO-08) laid out how that challenge is getting more difficult and how the solutions will need to be bipartisan.
Chairman Smith: “Social Security is vital to the retirement foundation of millions of Americans. Preserving this program for future generations, as well as benefits for current retirees, is one of the most important issues we must address in this Committee. And we must do so together, absent political gamesmanship. The American people deserve that. An issue of this importance can only be accomplished if both sides agree to work together to find reasonable solutions to strengthen the program’s long-term finances. This challenge is not getting easier. In the most recent Social Security Trustees report, the date the retirement trust fund hits insolvency moved up one year earlier.”
Social Security Will Reach Insolvency Within the Next 10 Years
For the first time in history, both the Social Security Trustees and the Congressional Budget Office agree that the retirement Trust Fund will reach a point where balances cannot fully pay out benefits by 2033. The result will be current and future seniors facing cuts to their hard-earned benefits. Social Security Subcommittee Chairman Drew Ferguson (GA-03) highlighted that Social Security has financial challenges in the short- and long-term.
Rep. Ferguson: “CBO has a role to play here. Actuaries have a role to play here. One thing that y’all have gotten pretty close on is the date – where things head south. But there’s also differences between each of your projections. Again, one of the goals of the subcommittee is to understand the numbers. Can you briefly talk about the differences that may exist between CBO’s numbers and the actuary numbers, and how should we as members of the subcommittee view that difference?”
CBO Director Swagel: “The big picture is as you said, the system has financial challenges, and as in the near term with the exhaustion date, within the 10-year budget window, and the long-term solvency of the system.”
More Americans in the Workforce Will Help Support Social Security’s Future
In the latest report, the Social Security Trustees cited lower labor productivity and slower economic growth as reasons why the retirement Trust Fund will go insolvent one year earlier than projected. Rep. Blake Moore (UT-01) pointed out that getting Americans into the workforce is part of the solution to strengthening Social Security.
Rep. Moore: “Some recent statistics have highlighted that the Social Security Trust Fund insolvency could even come a year earlier. We’re seeing a lot of that due to the
the reduced levels of GDP, labor productivity over that production period. Can you describe how, why do we now expect to lower labor productivity levels and have declining workforce participation may exacerbate this issue?”
Mr. Goss: “The Trustees did do a reassessment for this year’s Trustees Report, suggesting the possibility that the level of labor productivity and GDP might be lower in 2023, because of an economic slowdown, and remain lower through the balance of the 75-year projection period…CBO actually projected an even lower growth rate and aggregate GDP in 2023, than the Trustees did…”
Rep. Moore: “We’ve got to come up with innovative solutions, making sure we get a positive productive workforce back into our economy. I’ll just close with
the sort of bipartisan effort to really consider how we act. We have got to work together and do something as we approach this calamity up ahead. I know that our team is committed to that.”