By Ted Gotsch
Senior Policy Analyst, Content and Publications
(08/13/24)
Americans may increasingly hold polarizing views about the role of government, but there is at least one federal program that brings people of all political stripes together—Social Security.
The U.S. commemorates the 89th anniversary of the enactment of the Social Security Act on Aug. 14. Created as a safety net to support elderly retired workers, the program has been expanded over the years to cover survivors of workers, as well as the disabled. The program’s benefits remain extremely popular, with a recent Pew Research Center poll showing that 80% of all Americans, regardless of political affiliation, oppose any benefit cuts.
Whether that is possible, however, remains open to debate. The program’s 2024 annual report projects that benefits will be paid in full until 2035, after which only partial benefits will be paid. As a result of Social Security’s financial state, actuaries, elected officials, and the general public must carefully weigh different methods to address its solvency and ensure that all beneficiaries will continue to receive their full promised benefit payment.
For years, Academy volunteers have been active in conducting evaluations of the program, as well as setting forth possible solutions that would ensure Social Security remains afloat. In July, the Academy’s Social Security Committee released an issue brief giving an actuarial perspective on the latest Trustees Report. It explains how, under current projections and with no modifications to the program, benefit payments will drop to 83% beginning in 2035 and will further drop to 73% by 2098.
In April, the Academy unveiled an updated monograph and issue brief on individual equity and social adequacy as they apply to Social Security reform options. The monograph and issue brief compare three different Social Security reform proposals using individual equity and social adequacy—two important principles underlying the program—and provide details on each of the proposals, examining the data used in the illustrations.
The Academy’s best-known contribution to the broader public discussion is “The Social Security Challenge,” which was updated in February. The interactive simulation puts the player in the role of a decision-maker. Going through the steps of the simulation, the player learns about some options when considering how to upgrade the finances of the program and the implications when different choices are made in order to balance Social Security’s proverbial books. More specifics around potential solutions are also discussed in the October 2023 issue brief, Sooner Rather than Later. The issue brief makes the point that earlier reform action would allow for any tax increases and/or benefit reductions to be phased in gradually, providing individuals more time to plan for and adjust to the changes.
While the future of Social Security is a kitchen-table political issue—something that always comes up during election years and when the economy is less than robust—it hasn’t been a priority debate topic this year. As we anticipate a new administration in 2025, the ongoing and consistently nonpartisan work of the Academy will continue to be a trusted resource by elected officials, lobbyists, and other key stakeholders.
The solvency of one of America’s most popular and necessary social insurance programs will depend upon the expertise that actuaries bring to policy debates. Thanks to our volunteers, the Academy will continue to offer resources and perspectives to help extend the program with sound financial footing beyond the next 10 years.
