In recent weeks, a few commentators have sounded an alarm about the recession’s impact on Social Security’s near-term prospects, which may lead some people to think that the program faces financial problems in the next several years. Fortunately, that is not the case. Social Security continues to run annual surpluses and remains capable of paying scheduled benefits in full for the next three decades or so.
The deep recession has indisputably affected the Social Security system’s finances, and the next report of the Social Security Trustees — due this spring — is expected to show some deterioration in the program’s financial outlook. (Last year’s report estimated that starting in 2037, balances in the Social Security trust funds would be inadequate to pay full benefits promised under current law.) But Social Security faces no immediate threat.
Nevertheless, Congress and the Administration should act sooner rather than later to restore Social Security’s long-run solvency. Prompt action would allow changes to be phased in gradually and afford people ample time to adjust their financial plans.
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