Congress must not wait to refinance Social Security

This year’s Social Security Trustees Report, which the agency’s new commissioner expects to be released sometime in April, will likely echo previous warnings. The trustees’ last annual report cautioned that unless Congress changes the law, Social Security will only have enough money to pay about 80% of current benefits by 2034. That is when the program’s reserves run dry and it will only be able to pay out what Social Security taxes bring in.

Social Security’s long-run funding problem is widely known. What’s less apparent is that the process of spending down its reserves is already increasing federal spending and pushing up annual deficits. Drawing down reserves in the Social Security trust fund requires the U.S. Treasury to sell bonds.