Vicky Arias, FISM News
A nonpartisan report from the Congressional Budget Office (CBO) in December anticipates that Social Security will be unsustainable at current levels in nine years if laws don’t change.
The report predicts a financial gap in the Social Security program between its current expenditures, or outlays, and its income of funds by 2033. By that time, the federal program would be paying out more money than it would be receiving, the report states.
According to the report, “if the gap between the trust funds’ outlays and income occurs as CBO projects, then the balance in the trust funds will decline to zero in 2033 and the Social Security Administration will no longer be able to pay full benefits when they are due.”
The CBO explains that “the federal government could maintain the necessary trust fund balances through 2096 if it immediately, and permanently, raised payroll tax rates by about 4.9 percentage points, or implemented an equivalent reduction in benefits or combination of tax increases and benefit reductions.”
Additionally, the CBO announced yesterday that the federal deficit for 2023 is $1.4 trillion, which amounts to 5.3% of GDP. The federal deficit is expected to swell to 6.9% of GDP by 2033, a drastically higher deficit percentage than the typical average over the past 50 years, which is 3.6% of GDP.
The reports come at a time of economic instability and record inflation for the nation.
Inflation rates hit a 40-year high in 2022, and the CBO announced that unemployment rates will continue to rise through the beginning of 2024.
Phil Swagel, the director of the CBO, said financial policy changes must be made to stop an economic crisis.
“Over the long term, our projections suggest that changes in fiscal policy must be made to address the rising costs of interest and mitigate other adverse consequences of high and rising debt,” Swagel said.
Recent spending legislation has certainly impacted the deficit.
IRONICALLY NAMED ‘INFLATION REDUCTION ACT’
The Inflation Reduction Act of 2022 allows for tens of billions of dollars to be spent on climate and Internal Revenue Service (IRS) funding. The act gave $80 billion to the IRS over the next decade to fund the hire of 87,000 new IRS agents and update its technology.
Sen. Ted Cruz (R-Texas) explained the potential repercussions of so many additional agents in an interview with Fox Business.
“Imagine IRS agents descending upon America like a swarm of locusts,” Cruz said. “And by the way, these IRS agents aren’t there to go after billionaires. They’re there to go after you. They’re there to go after your small business. They’re there to go after your family. The Democrats’ idea is if they audit … every American, think of all the money they can raise.”
According to the House Committee on Small Business, “the IRS has disproportionately prioritized auditing low-wage workers. People making less than $25,000 are five times more likely to be audited than the rest of taxpayers.”
The IRS has disproportionately prioritized auditing low-wage workers. People making less than $25,000 are FIVE times more likely to be audited than the rest of taxpayers.
— House Committee on Small Business (@HouseSmallBiz) February 15, 2023
Additionally, lawmakers allocated billions of dollars for climate and energy programs in the act, including $3 billion for the postal service to buy “zero-emission vehicles,” and “$60 billion in environmental justice priorities.” Also included was “$1 billion for clean heavy-duty vehicles, like school and transit buses and garbage trucks,” and the list goes on.
Speaker of the House, Republican Kevin McCarthy, yesterday posted a statement describing the Biden administration’s out-of-control spending and explained that changes must take place.
“Since President Biden was sworn in, his policies have led to over $13 trillion in new spending,” McCarthy wrote.
By 2033, deficits will reach nearly $3 trillion … Unless we change course, we will spend $10.45 trillion just on interest over the next 10 years. That is more than we will spend on defense, 3.5 times what we will spend on veterans programs, 1.5 times what we spend on Medicaid, and over [two-thirds] of what we will spend on Medicare.