Potential Social Security cut of $17,000 would surprise most couples, survey finds

(NewsNation) – Millions of Americans could see their Social Security benefits cut in just nine years, and according to a recent report, most people have no idea.

A new study by the Peter G. Peterson Foundation found that only 30% of Americans knew that Social Security benefits would be cut by 21% in nine years if there were no reform.

That reduction would amount to nearly $17,000 a year for the average couple, the report said. These figures are based on projected revenue shortfalls growing over the next decade, potentially triggering automatic reductions.

After learning of the impending cuts, 97% of respondents agreed that it is important for elected leaders this fall to strengthen the federal pension program so that it is fully available.

“Voters understand that ‘leaving’ Social Security is not an option because automatic cuts are unacceptable and waiting only makes the problem more costly and difficult to solve,” Michael A. Peterson said in a statement. , CEO of the Peterson Foundation.

The latest poll reveals a disconnect between the Social Security funding crisis and Americans’ understanding of a problem that lawmakers have continued to address.

Because of the country’s aging population, social security expenditures are now outstripping income. In 2022, Social Security spent $147 billion more than it brought in — a gap expected to widen to $670 billion in 2033, according to the Peterson Foundation.

This year, an average of almost 68 million people will receive a Social Security benefit each month, and by 2035, the number of Americans age 65 and older will reach 75 million.

Congress can address the funding dilemma by either raising payroll taxes, which make up most of the program’s revenue, or cutting benefits. However, both options have proven to be politically astute.

The last major Social Security overhaul came roughly 40 years ago when the federal government gradually raised the eligibility age from 65 to 67. When that happened in 1983, Social Security’s bankruptcy was just months away.

Today’s situation is much less urgent, but according to the Brookings Institution, the changes that need to be made now are significantly greater than they were then. Delaying reforms will require even greater changes.

In May, the annual report of the Social Security and Medicare trustees came with some good news. Social Security’s closing date was pushed back a year from the previous estimate.

However, the Social Security Administration Board predicts that the Old Age and Survivors Social Security (OASI) trust fund will become insolvent in 2033. This means that the program will not be able to cover expenses and, without any changes, will lead to a 21% benefit cut in the main Social Security trust fund.

The Associated Press contributed to this report.