New report indicates pandemic will cause Social Security funding shortage

The pandemic presents some future funding challenges to benefits for older Americans, according to the 2021 Social Security and Medicare Trustees’ Reports.

Walt Dawson, assistant professor in the School of Public Health at Oregon Health and Science University, said the programs are foundational to Americans’ health and economic security as they age.  While the reports are troubling, he noted they are not exactly surprising because a number of challenges to the Social Security program have been known for a long time. “The COVID-19 pandemic has made the situation slightly worse,” Dawson explained. “And increased by one year when Social Security, for example, will no longer be able to pay out all benefits.”

Dawson said without major policy changes; benefits would have to be reduced by 24% in 2034, which he thinks would be devastating for older Americans. He said it is not only the pandemic and economic fallout to blame; a rapidly aging population is also a contributing factor.

Bandana Shrestha, state director of AARP Oregon, is concerned lawmakers in Congress could make cuts to critical programs behind closed doors.  “We really think that these important programs need transparent public input,” Shrestha asserted. “Conversations that really allow us to make thoughtful decisions about the security and long-term stability of these programs.”

Dawson believes the pandemic could be an inflection point in how Americans think about Social Security.  “While there’s this real need to fix the challenges that are facing this program, there’s a real opportunity to think about how they can be enhanced and improved to provide for people, too,” Dawson urged.