Social Security Seemed Like a Future Problem. The Virus Changed That. - The New York Times

The pandemic has hastened the cash crunch’s arrival by wiping out jobs and the payroll taxes — Social Security’s dedicated source of revenue — that they provide.

(Even more pressing may be a fix for Social Security’s disability program, which has a trust fund of its own. A report issued by the Congressional Budget Office last month projects that fund could be exhausted in 2026.).

President Trump hasn’t released a proposal, but he has said he wants to eliminate the payroll tax — Social Security’s lifeblood — as an expansion of the temporary holiday enacted by executive action over the summer.

Instead, he said, he would pay for the program through the general budget, which could count on “tremendous growth.”.

“President Trump will always protect Social Security, as he has stated numerous times,” she said.

“And having Social Security in the mix with everything else puts the program at risk in the future.”.

“A key principle of social insurance in general — and the Social Security program in particular — is that contributions are linked to benefit calculations,” said William Arnone, chief executive office of the National Academy of Social Insurance, a nonpartisan group of social insurance experts.

Biden’s plan also proposes more generous benefits, including a new minimum benefit for new retirees equivalent to 125 percent of the poverty level, or $15,950 in 2020.

Biden’s proposal would buy the program only an additional five years of solvency, according to the Urban Institute analysis, though it would soften the benefit cuts that would be necessary if further changes weren’t made.

“The vice president’s financing proposal shows how he would protect and increase benefits for all Social Security recipients while making a down payment on long-term solvency,” said Gene Sperling, an outside adviser to Mr.

Just about every American has something at stake, or someone close who does: Roughly 178 million workers contribute to the program, and, this year, an estimated 45.8 million retirees will receive nearly $70 billion in benefits — the average monthly check is about $1,500 per month, according to the Social Security Administration.

Under current law, retirement benefits can come only out of the trust fund, which will be depleted by 2034, according to Social Security Administration estimates that do not take the pandemic into account.

At that point, taxes collected will be enough to pay only 76 percent of benefits.

About half the population 65 and older lives in households that receive at least half of their income from Social Security, according to a 2017 study published in the Social Security Bulletin.

Roughly 25 percent of elderly households rely on Social Security for at least 90 percent of their income.