“Unless we act now,” President Jimmy Carter warned in 1977, Social Security’s retirement trust fund will run out of money in 1983. That statement triggered several reforms that put the program on a firmer footing.
Social Security is once again nearing a critical point. The day of reckoning is expected to come in 2033 if nothing is done to repair its finances. Retirees’ benefits would have to be cut by 21 percent, according to the agency’s May report on the trust fund’s fiscal status.
In this NewsHour video, Alicia Munnell, director of the Center for Retirement Research, which publishes this blog, says reform is long overdue and discusses options for repairing the program. The changes required aren’t complicated but will require tradeoffs.
Past changes to restore Social Security’s fiscal soundness included higher taxes and benefit cuts. In December 1977, President Carter signed legislation that included an increase in the payroll tax. In 1983, Congress made other significant changes, including on the benefits side, by increasing the age at which retirees can collect their full benefit. Retirees who sign up for benefits prior to their full retirement age under the program receive smaller checks every month.
Once again, fixing Social Security will require Congress – and all of us – to make some tough choices to repair a program retirees rely on.
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