Christian Smith
(NewsNation) – Millions of Americans could see their Social Security benefits cut in just nine years, and according to a recent report, most people have no idea.
A new Peter G. Peterson Foundation Research found that only 30% of Americans knew that Social Security benefits would be reduced by 21% over nine years without reforms.
That cut would equate to nearly $17,000 a year for the average couple, the report said.
After learning of the impending cuts, 97% of respondents agreed that it is important for elected leaders this fall to strengthen the federal retirement program so that it is fully available.
“Voters understand that ‘not touching’ Social Security is not an option because automatic cuts are unacceptable and waiting only makes the problem more expensive and difficult to solve,” said Michael A. Peterson, CEO of the Peterson Foundation, in a communicated.
The latest poll reveals a disconnect between the Social Security funding crisis and Americans’ understanding of a problem that lawmakers have continued to address.
Due to the country’s aging population, Social Security spending is now exceeding revenue. In 2022, Social Security spent $147 billion more than it took in — a gap that is expected to widen to $670 billion by 2033, according to the Peterson Foundation.
This year, an average of almost 68 million people will receive a Social Security benefit every month, and by 2035, the number of Americans ages 65 and older is expected to reach 75 million.
Congress could solve the funding dilemma by increasing payroll taxes, which represent the majority of the program’s revenues, or reducing benefits. However, both options proved politically thorny.
The last major Social Security reform occurred about 40 years ago, when the federal government gradually raised the eligibility age from 65 to 67. When this happened in 1983, Social Security’s insolvency was in just a few months.
The current situation is much less urgent, but according to the Brookings Institution, the changes that need to be made now are significantly greater than they were then. Delaying reforms will require even bigger changes.
In May, the Social Security and Medicare administrators’ annual report brought some good news. The Social Security bankruptcy date has been pushed back a year from the previous estimate.
Even so, the Social Security Board of Trustees anticipates that the Social Security Old-Age and Survivors Insurance (OASI) trust fund will be insolvent in 2033. This means the program will not be able to cover expenses and, without any changes, will lead to a 21% cut in benefits from the main Social Security trust fund.
The Associated Press contributed to this report.
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