Another Grim Report From Social Security Trustees

Politicians could stop the doomsday clock from ticking, and the program could be financially secured for the next 75 years if Congress would do two things.

The trustees' report came out a couple of weeks ago and made news for a day or two. Shutterstock

I’m a little late in getting to this issue. But as the old adage goes: Better late than never. This column is going to be about the annual report of the Social Security Board of Trustees concerning the financial health of the program. (More about this board at the end of the column.)

The trustees’ report came out a couple of weeks ago and made news for a day or two. I think the ho-hum reaction from the public to this report is partly because, as has been the case for many years now, the report says the Social Security trust funds are like a ticking doomsday clock. And the trustees have always urged action by the president and Congress to do something before the clock strikes midnight. And then nothing gets done! So, the public goes, “Ho hum!” I'll have some comments about how easy it would be to shore up Social Security financing at the end of this column.

To write this column, I started to paraphrase the statement issued by the Social Security Administration (SSA). But then I thought, they wrote it to be read by the public. So here it is—word for word from the SSA’s press office:

“The Social Security Board of Trustees today released its annual report on the financial status of the Social Security Trust Funds. The combined reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to have enough dedicated revenue to pay all scheduled benefits and associated administrative costs until 2034, one year earlier than projected last year, with 81 percent of benefits payable at that time.

“The OASI Trust Fund is projected to become depleted in 2033, the same year as last year’s estimate, with 77 percent of benefits payable at that time. The DI Trust Fund reserves are not projected to become depleted during the 75-year projection period.

“In the 2025 Annual Report to Congress, the Trustees announced:

• The reserves of the combined OASI and DI Trust Funds declined by $67 billion in 2024 to a total of $2.72 trillion.
• The total annual cost of the program is projected to exceed total annual income in 2025 and remain higher throughout the 75-year projection period. Total cost began to be higher than total income in 2021. Social Security’s cost has exceeded its non-interest income since 2010.
• If Congress does not act, combined trust fund reserves are currently projected to become depleted in 2034. At that time, there would be sufficient income coming in to pay 81 percent of scheduled benefits.

“Other highlights of the Trustees Report include:

• Total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.42 trillion in 2024. ($1.29 trillion from net payroll tax contributions, $55 billion from taxation of benefits, and $69 billion in interest)
• Total expenditures from the combined OASI and DI Trust Funds amounted to $1.48 trillion in 2024.
• Social Security paid benefits of $1.47 trillion in calendar year 2024. There were about 68 million beneficiaries at the end of the calendar year.
• The projected actuarial deficit over the 75-year long-range period is 3.82 percent of taxable payroll—higher than the 3.50 percent projected in last year’s report.
• During 2024, an estimated 184 million people had earnings covered by Social Security and paid payroll taxes.
• The cost of $7.4 billion to administer the Social Security program in 2024 was a very low 0.5 percent of total expenditures.
• The combined trust fund reserves earned interest at an effective annual rate of 2.5 percent in 2024.

“The Board of Trustees usually [is made up of] six members. Four serve by virtue of their positions with the federal government: Scott Bessent, secretary of the treasury and managing trustee; Frank Bisignano, commissioner of [the Social Security Administration]; Robert F. Kennedy Jr., secretary of health and human services; and Lori Chavez-DeRemer, secretary of labor. The two public trustee positions are currently vacant.”

That was the SSA statement. Now, here are my comments about the Board of Trustees—specifically, why there are no public trustees. For almost all of its history, the Board has had two public trustees: one appointed by the Republicans and one appointed by the Democrats. The Republican appointee was always a fiscally conservative financial type, such as a banker or insurance executive. The Democratic nominee was always a liberal—usually someone from the labor movement. But once on the board, they all came together and generally got along. However, in the politically divisive world of the past 10 years or so, the Republicans in Congress have refused to approve the nomination of any Democratic trustee, and the Democrats in Congress have refused to approve the nomination of any Republican trustee. If you want to learn why the lack of public trustees is bad news for Social Security, just search “Why does the Social Security Board have no public trustees” and read the analyses from people much smarter than I am.

Now, one last point about potential Social Security reform. Politicians could stop the doomsday clock from ticking, and the program could be financially secured for the next 75 years if Congress would do two things. First, raise the retirement age to 68. And second, increase the payroll tax by one-fourth of 1 percent. (The tax rate hasn’t increased in 40 years.) It really would be that simple. But sadly, the Democrats refuse to support the former, and Republicans refuse to support the latter. And neither side will budge!

To learn a lot more about Social Security financing, get my book “Social Security: Simple and Smart.” There is a whole chapter in it about that issue, and it includes many other proposals for Social Security reform.