Social Security Trust Funds Hit Hard by Unemployment from Virus; Insolvency Pushed Up

( from Politico)Social Security could be insolvent by the end of this decade because of the coronavirus pandemic, according to some new estimates, creating new pressure for Congress to fix the troubled program after decades of inaction.

The last official government projection had the program running out of money by 2035. But some outside economists are looking at the trends and moving up the date when the program starts paying out more than it takes in: Tens of millions of workers are suddenly unemployed and not paying into the government account that funds benefits for retired workers. At the same time, a flood of older Americans who’ve lost jobs are expected to start drawing benefits as soon as they’re eligible.

Note: Senior advocacy groups including the New York State Alliance for Retired Americans and New York StateWide Senior Action Council want to lift the earnings cap on Social Security so that payroll taxes are not ended when a worker reaches an annual earnings of $137,000. Former Vice President Joseph Biden is proposing that taxes be resumed on earnings over $400,000. The earnings cap had been pegged to cover 90% of earned income but that has dropped to 83% according to Politico so some upward adjustment of the earnings cap is needed just to preserve the intended financing for Social Security.