Social Security in an Era of Retrenchment: What Would Happen if the Social Security Trust Funds were Exhausted?

Social Security's income, including interest income on the Social Security trust funds' reserves, currently exceeds costs. The system, however, is facing a long-term deficit. Specifically, the Social Security Trustees project that, unless the Social Security Act is amended, by 2033 the system's reserves will be depleted, and its income will only be sufficient to cover about 75 percent of scheduled benefits.

This article addresses two questions related to the funding of Social Security. Part I discusses what would happen if the Social Security trust funds were exhausted. Part II discusses whether Congress could amend the Social Security Act to reduce retroactively scheduled but unpaid Social Security benefits.