U.S. Lawmakers Need $20.4-Trillion Social Security Funding

For more than eight decades, Social Security has been a financial anchor for our nation's retired workforce.

Photo Insert: Social Security is projected to have a funding shortfall over the next 75 years.

The monthly payouts the program provides were responsible for lifting 22.5 million people out of poverty in 2020, including 16.1 million seniors aged 65 and above, according to an analysis from the Center on Budget and Policy Priorities.

But this foundational program isn't on the best financial footing, and it's resulted in a lot of finger-pointing -- especially at elected officials. Social Security has a $20 trillion problem, Sean Williams disclosed in Motley Fool.

Ever since the first payouts to retired workers began in 1940, the Social Security Board of Trustees has released a lengthy annual report that examines the past, present, and future solvency of the program.

The Trustees Report provides an in-depth look at how Social Security generates revenue and where those dollars eventually end up, as well as forecasts how fiscal policy and a multitude of changing demographic trends might impact the program.

Every single annual Trustees Report since 1985 has cautioned that long-term revenue -- the Trustees define the "long term" as the 75 years following the release of a report -- wouldn't be sufficient to cover outlays, inclusive of annual cost-of-living adjustments.

In plainer English, Social Security is projected to have a funding shortfall over the next 75 years. The 2022 Social Security Board of Trustees Report estimates the program's long-term funding shortfall at $20.4 trillion.

Worse yet, the Old-Age and Survivors Insurance Trust Fund (OASI), which is responsible for doling out checks to 48.8 million retired workers and 5.8 million survivor beneficiaries each month, is forecast to exhaust its asset reserves by 2034.

If this excess capital built up since inception were to be exhausted, sweeping benefit cuts of up to 23% may be necessary to sustain payouts through 2096 without any further reductions.

Although a long list of demographic factors is responsible for Social Security's shaky financial situation, it's Congress that often takes the blame. If you were to peruse the comment section of Social Security articles posted online, it's pretty much a guarantee you'll find a response that suggests Congress' greed put the program in its current dilemma.

Specifically, some readers believe the best solution to Social Security's woes is for Congress to "return the money it stole and pay it back, with interest." Yet, 82 years of historic data from the Trustees showed that lawmakers did not pilfer a penny from Social Security's piggy bank.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic