In a long-predicted Social Security crisis, up to 70 million people will face a possible 66% reduction by 2033. It has been threatened with cuts to finance the Social Security Trust Fund, which It is expected to be bankrupt, to offer money to retirees, disabled and survivors. Without such a radical change in legal interpretation, tens of millions of beneficiaries would be subjected to radical financial assistance, a revolution in the American social security system.
The Old-Age and Survivors Insurance Trust Fund (OASI) could run out of money in 2033. The Social Security issue is based on the (OASI), which is about 2.6 trillion of dollars. This fund is used to pay into the Social Security trust fund, which is intended to make up the difference between taxes collected and benefits offered. However, in the recent past, Social Security began providing more benefits than it gets from payroll taxes; The program is, in effect, borrowing money from its reserve.
The Trust Fund Would Be Depleted by 2033
On the other hand, it is commented that without this reform, The trust fund would be depleted by 2033, which, basically, is equivalent to a 21% cut for everyone. This cut will affect around 70 million dollars of Social Security funds for around 69 million users and/or citizens, mostly retirees, workers with disabilities and relatives of survivors, who depend exclusively on of such payments.
For example, those single workers who have an average income, who expected to receive $9,355 per year, will now receive $1,155 less, while an average couple who expected to receive $18,710 per year, will now only receive $16,210 per year. That decline is going to be evident in these rates, which illustrate how it will affect the incomes of people who depend on Social Security for their basic needs more than people with reduced incomes.
What the upcoming 2024 election could mean for your Social Security payments
Given that we are nowhere near the 2024 presidential elections, Social Security has become a fundamental point of attention. However, both political parties know about the implications of this measure, including the decrease in Social Security for handfuls of United States citizens, especially the elderly. Such a measure of cutting social assistance would represent a 21% cut in benefits, which would give rise to high rates of poverty among older generations and would affect the social and economic fabric of the nation.
Shannon Benton, executive director of the Senior Citizens League, also said “low-wage workers can afford to save for retirement compared to higher-wage Americans; Therefore, they are more vulnerable to depending on Social Security. Either way, political consequences are at risk.”
Democrats and Republicans agree that cutting Social Security benefits without any strategy to reform it would undoubtedly have serious political consequences. For lawmakers, it appears to be a balancing act to change the program without offending the handful of people who depend on these Social Security checks to meet their food needs and pay their bills in their later years of life.