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Congress has less than a decade to fix Social Security before it runs short of cash

STEVE INSKEEP, HOST:

We hear this from time to time, an assertion that Congress has only a few years to fix Social Security. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: The annual checkup on Social Security's finances actually offers some good news. Thanks to workers' higher productivity and a drop in disabilities, the popular program isn't burning through cash quite as fast as trustees expected a year ago. But that only delays the inevitable. With tens of millions of baby boomers retiring and starting to draw benefits, and fewer people in the workforce paying taxes for each retiree, Social Security is expected to run short of cash in just over nine years. If that happens, almost 60 million retirees and their families would automatically see their benefits cut by 21%. Nancy Altman, who heads the advocacy group Social Security Works, doesn't believe lawmakers will let it come to that.

NANCY ALTMAN: If they didn't act, not only would they all be voted out of office, they couldn't even remain in Washington. They'd be chased down the streets.

HORSLEY: Congress could patch the hole in Social Security's finances by either raising taxes, reducing benefits or some combination of the two. But as Maya MacGuineas, who heads the Committee for a Responsible Federal Budget, notes, so far a politically palatable solution has been elusive.

MAYA MACGUINEAS: When you see the two major candidates running for president tripping over themselves to promise what they won't do to fix the problem, you have to worry because those kinds of reforms really start at the top.

HORSLEY: The Biden administration has ruled out any cut in benefits and has called for higher taxes on the wealthy to prop up Social Security. Congressional Republicans, on the other hand, have proposed raising the retirement age for young workers while trimming the benefits formula. MacGuineas says it would've been better if Congress had addressed the shortfall years ago, before the boomers started drawing benefits. She says, the longer Congress waits, the more painful any fix is likely to be.

MACGUINEAS: Every year the trustees warn us, we have to make changes, and the sooner we make them, the better and easier it will be, and every year we fail to make those changes.

HORSLEY: Medicare's finances have also improved somewhat in the last year, thanks to a strong economy and lower than expected spending. Still, that program, which provides health care for nearly 67 million people, is expected to face its own cash crunch in 2036.

Scott Horsley, NPR News, Washington.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
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