The Social Security program is popular with Americans. It is also in trouble. What is the future of the Social Security program?
The financial problems of the Social Security program are likely to be important to federal employees who are under the FERS retirement program as they are paying into the Social Security program and this system is a major component of their income after they retire. Federal employees and retirees covered by the older CSRS retirement program did not pay into the Social Security system and do not receive Social Security payments as part of their regular federal retirement.
The House Ways and Means Committee is currently holding hearings on the future of the program and how to address its problems. Here are some of the current “challenges” facing this program as outlined by Congressman Johnson (R-TX) prior to the start of the hearing.
Financial Problems Facing the Social Security Program
According to this year’s report from the Social Security Board of Trustees, Social Security will be unable to pay as much to future retirees as these future retirees may be expecting to receive. And, according to experts on the program, it isn’t just that Social Security’s current financing outlook is in trouble. It will also be increasingly difficult to protect current benefits if action is not taken soon to protect the system.
According to the Social Security trustees’ report, the Old Age and Survivor program will be unable to pay full benefits beginning in 2035, three years earlier than projected in the previous annual report. That means that workers who are 44 years old today will reach their full retirement age in 2035 at which point they and everyone else will face benefit cuts of 25 percent. In less than four years, Social Security’s Disability Insurance program will be unable to pay full benefits.
The average monthly benefit for a disabled worker today is $1,111. In 2016, revenues will cover 79 percent of benefits. This translates into a potential cut of about $233.