Overview
- The Committee for a Responsible Federal Budget published a state-by-state analysis on June 3 that applies Social Security Administration projections showing the Old-Age and Survivors Insurance trust fund could be exhausted in 2032 and would trigger a 24% across-the-board cut under current law.
- The average beneficiary would lose roughly $500 a month under that 24% scenario, with 63 million current recipients affected and 29 states facing average monthly cuts above $500; Connecticut would see the largest average loss at about $556.
- CRFB estimates the annual hit would total about $345 billion, equal to roughly 1.1% of U.S. GDP, and would exceed 1% of GDP in 40 states while large states would lose tens of billions of dollars in benefit payments.
- By law, benefit payments would be limited to incoming payroll-tax revenue once trust reserves are gone, SSA and budget analysts say, and the agency’s formal Trustees Report due later this month will update the technical timeline.
- Policymakers can avoid automatic cuts by raising revenue or changing benefit rules, but proposals such as removing the payroll-tax cap or trimming future benefits are politically fraught, and concurrent administrative shifts and new retirement-account plans are reshaping the debate.