Social Security is projected to run out of money in just 12 years from now!

The trust fund for Social Security’s retirement and survivor benefits is projected to run out of money in 2034, just 12 years from now, and progressive New Jersey Democrat Lisa McCormick is once again calling on Congress to take action to infuse the program with enough money to cover full benefits in perpetuity.

The Social Security Board of Trustees’ annual report on the financial status of Social Security showed the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) trust funds are projected to become depleted in 2035, one year later than projected last year, with 80 percent of benefits payable at that time.

Social Security’s OASI Trust Fund has only enough money to cover full benefits and expenses until 2034. Once that trust fund runs out of money, revenue from the FICA payroll tax would only cover 77% of promised Social Security benefits, so Congress would face the choice of cutting benefits, raising taxes or both.

Only the first $147,000 in earnings is subject to the 6.2% payroll tax, so people who make more than that stop contributing to the retirement fund even if they make millions or billions of dollars.

The Medicare Part A Trust Fund for hospital care now has sufficient funds to cover its obligations until 2028, two years later than reported last year after an economic slowdown caused by the pandemic.

Democrat Lisa McCormick, one of New Jersey’s leading progressives, is calling on Congress to keep Social Security and Medicare solvent and make the wealthy pay the same tax rate as ordinary workers so the retirement program may be expanded.

Although the report gave a brighter outlook than last year, McCormick said Congress has an obligation to keep Social Security and Medicare solvent.

“It is Congress’ responsibility to keep the promise made more than 86 years ago and to safeguard Social Security for all Americans. Congress must also ensure the benefits keep up with Americans’ expenses – today, tomorrow, and forever,” said McCormick. “Social Security is not a handout as some politicians pretend it to be. It is an insurance program consisting of retirement, disability and survivor benefits for those who paid into the system.”

“This year, the Social Security Administration expects to pay out $1.2 trillion in benefits to 66 million individual Americans,” said McCormick.

The Alliance for Retired Americans issued a statement saying it is time to strengthen both Social Security and Medicare for the future and expand benefits.

“Congress must act on two fronts to make that happen: lift the cap on earnings — currently $147,000 — subject to the 6.2% payroll tax, and lower prescription drug prices to stem their rapid growth,” said Richard Fiesta, of the Alliance for Retired Americans.

“An expansion of Social Security benefits is critical to help seniors fight inflation, and H.R. 5723, Rep. John Larson’s (CT) ‘Social Security 2100: A Sacred Trust,’ would make that increase a reality for all beneficiaries by requiring wealthy Americans to pay payroll taxes on wages above $400,000. Seniors need Congress to pass this critical legislation,” Fiesta added.

“For more than 86 years, the federal government has kept the promise to Americans who contribute to Social Security with each and every paycheck, that they would be able to retire with dignity,” said McCormick, who said she strongly objects to Republican US Senator Rick Scott’s plan to “sunset” Social Security and Medicare after five years.

“No worker who paid into the system over a lifetime should retire into poverty but five million American seniors currently live in poverty,” said McCormick. “These programs should be expanded, not canceled like the Republicans want.”

In addition, the Social Security Disability Insurance (DI) Trust Fund, which pays benefits to people with disabilities, is no longer projected to be depleted within the 75-year projection period, a significant improvement from last year.

Fiesta voiced his strong disapproval that despite these figures, Sen. Rick Scott (FL), who chairs the National Republican Senatorial Committee that recruits and supports Republican candidates for the U.S. Senate, has released a plan that would sunset all federal legislation, including Social Security and Medicare, after five years.

“No one should accept this lie, and we will not stand for any cuts to the benefits we have paid for,” Fiesta concluded.

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