"Social Security is a program that millions of older Americans rely on today. And without those monthly benefits, many would find it a struggle to cover their basic costs. But Social Security is facing two major problems that lawmakers keep failing to address. Here's what those problems are, and what potential solutions exist for them. A revenue shortfall that could lead to broad benefit cuts"
"Social Security's Trustees reported earlier this year that benefit cuts could be on the table in either 2033 or 2034, depending on whether lawmakers agree to combine the program's two trust funds. But either way, the writing is on the wall - Social Security needs a major revenue boost to avoid sweeping cuts. There's a solution lawmakers can implement - higher taxes."
Social Security faces a major financial crisis as projected benefit obligations will exceed payroll tax revenue in coming years, forcing use of trust funds until depletion. Trustees reported benefit cuts could occur in 2033 or 2034 depending on combining the program's two trust funds. Lawmakers can boost revenue by raising the Social Security tax rate or lifting the wage cap, but tax hikes remain politically unpopular. Each delay increases insolvency risk and could plunge millions of retirees into poverty without action. The program also suffers from a poor COLA formula that leaves seniors scrambling to keep up.
Read at 24/7 Wall St.
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