Americans on SS: What will you do when SS will Cut $18,000 in 7 years?

[Knight Rider]

The committee for a responsible budget predicts SS cut to the tune of $18,000 in seven years. What are American expats planning to do in the future? 

https://www.crfb.org/blogs/retirees-face-18100-benefit-cut-7-years

[gamb00ler]

I see and hear that the Russians are paying good money for internet trolls.  Many obvious examples here on AN.  I'm hoping that in 7 years l'll still be able to read and respond with the appropriate nonsense.

[Isaan sailor]

They keep kicking the can down the road.  They’ll fix Social Security but only at the last minute.

[Jingthing]

The cut would be a (severe) percentage of your current benefit at the time of the cut so not a set number for all.

[Jingthing]

34 minutes ago, Isaan sailor said:

They keep kicking the can down the road.  They’ll fix Social Security but only at the last minute.

Yes and no. 

Actual last minute would be impossible to fully fix.

Relatively speaking to fully fix it and avoid a cut, we're getting close to the real last minute.

[Mark1969]

If it's not enough, you go broke.

[Jingthing]

3 minutes ago, Mark1969 said:

If it's not enough, you go broke.

Whatever the level, chances are it'll still much more affordable to live in Thailand than in the U.S.!

[MarkBR]

Many US Americans will be affected: Democrats, Republicans & any folk of any other political persuasion that exists.  I suspect the Republican ones will feel the most betrayed.   The road to Damascus is long & painful.

[Jingthing]

To be clear, this future cut is very real IF it isn't fixed in time. It's required by law if the funds aren't there.

 

[Celsius]

8 minutes ago, Jingthing said:

Whatever the level, chances are it'll still much more affordable to live in Thailand than in the U.S.!

 

Chances are you have no idea how affordable it will be for FOREIGNERS to live in Thailand. 

[Jingthing]

Just now, Celsius said:

 

Chances are you have no idea how affordable it will be for FOREIGNERS to live in Thailand. 

It's all relative.

If Thailand isn't more affordable than the U.S. in the future, likely some other OK countries will be.

No guarantees.

[Knight Rider]

5 hours ago, gamb00ler said:

I see and hear that the Russians are paying good money for internet trolls. 

Where? I want to sign up. Lots of Americans in China are now accused of being paid CCP troll because they make videos of shining Chinese roads, infrastructures, and how cheap China is. I want to go to China and want to be a CCP troll but nobody is showing me where I can sign up. 

[Isaan sailor]

20 hours ago, Jingthing said:

Yes and no. 

Actual last minute would be impossible to fully fix.

Relatively speaking to fully fix it and avoid a cut, we're getting close to the real last minute.

Hope they move on it soon.  The 62 and over retirement voting block is huge.  No party can afford to alienate them.  If it comes down to a cut in SS, most of us will simply cut back on things like travel, western food, etc.

[gamb00ler]

On 7/26/2025 at 8:39 PM, Jingthing said:

Actual last minute would be impossible to fully fix.

Relatively speaking to fully fix it and avoid a cut, we're getting close to the real last minute.

I fully agree.

 

When the OASI trust fund is fully depleted in 2032/2033 the FICA tax income is projected to cover only about 79% of the full benefits.  So.... the FICA tax income would need to be raised by 21/.79 or about 26.6% from current levels to fully cover benefits payable.

 

If the FICA taxes were raised by 27% immediately, the OASI trust fund would only increase by a small amount between now and 2033.  Based on projections, in 2033 the reserve fund would then stop growing because benefits payable would equal FICA income.

[JimGant]

On 7/28/2025 at 7:51 AM, gamb00ler said:

When the OASI trust fund is fully depleted in 2032/2033 the FICA tax income is projected to cover only about 79% of the full benefits. 

It's only covering about that much now, or a little less (irrelevant for argument). The only difference between now and 2033 -- is that by 2033 there will be no more Trust Fund IOUs to cash in with Treasury, which today makes the Treasury legally obligated to collect the cash and pay the Social Security folks for their deficit in cash-in, and cash- out. Now, in 2033, the Treasury could just continue to sell bonds to China, for the cash needed for SS's deficit -- but there would be no noticeable difference in the added Federal deficit -- except now that deficit is only because of a moral obligation, not a legal one. 

 

Just a change by Congress to fund SS retirement same as SSI is funded today -- by general revenues. Sure, keep SS tax collections as a separate entity, for accounting purposes. But just accommodate the fact that SS retirement payments are just another line item, like aircraft carriers -- only a lot less easier to cancel. 

[Knight Rider]

4 hours ago, JimGant said:

It's only covering about that much now, or a little less (irrelevant for argument). The only difference between now and 2033 -- is that by 2033 there will be no more Trust Fund IOUs to cash in with Treasury, which today makes the Treasury legally obligated to collect the cash and pay the Social Security folks for their deficit in cash-in, and cash- out. Now, in 2033, the Treasury could just continue to sell bonds to China, for the cash needed for SS's deficit -- but there would be no noticeable difference in the added Federal deficit -- except now that deficit is only because of a moral obligation, not a legal one. 

By law, SS cannot borrow money. It can lend money from the trust fund but it cannot borrow money to cover payments.  There is no deficits due to SS. SS is self-sufficient. When the money runs out, it will be a "pay as you go system."

[Will B Good]

 

 

 

Can't the Mexicans pay for this?

[gamb00ler]

5 hours ago, JimGant said:

Now, in 2033, the Treasury could just continue to sell bonds to China, for the cash needed for SS's deficit -- but there would be no noticeable difference in the added Federal deficit -- except now that deficit is only because of a moral obligation, not a legal one. 

Congress would have to repeal/amend the Antideficiency Act before covering SS's shortfall in 2033.  

 

Antideficiency Act:

This act, specifically 31 U.S.C. § 1341, 1342, and 1517, is the cornerstone of preventing overspending. It prevents officers and employees from: 

- Making or authorizing expenditures or obligations in excess of available appropriations. 

- Involving the government in obligations without proper appropriation. 

 

Complete fabrication on your part.   Many times I've provided the actual facts to you, but you insist on believing the biased opinions of right- leaning media.

 

Here's a new look at your misconception.  You claim that the government is just borrowing from itself which makes the OASI nothing but an accounting 'trick'.  But, that is 100% false.  There are two separate entities involved in the loan.  The group that is on the hook to repay the loans from the OASI trust fund is comprised of ALL taxpayers since the government is borrowing on their behalf to fund all the services it provides.  The distinct and separate group that provided the capital that is being loaned to the federal government is comprised of those workers that have funded the trust fund through FICA deductions.  The most obvious distinction (that you cannot possible deny) is that corporations are included in the borrowing group but completely absent from the lending group.  Your argument that the government is just borrowing from itself is disproven.

[JimGant]

1 hour ago, gamb00ler said:

Complete fabrication on your part.   Many times I've provided the actual facts to you, but you insist on believing the biased opinions of right- leaning media

Ok, this is starting to be stupid. Your insistence on not believing CATO is curious.... It's all pretty simple, actually. I'll once again post this link, for anyone with a brain to analyze. I don't know if CATO is left or right oriented. But their observation in this link makes complete sense. Bottom line: Right now we're borrowing billions in cash to make up the SS cash deficit in receipts vs outgo. Come 2033 -- same picture -- it's irrelevant that in 2033 the Trust Fund is out of IOUs to cash in; the Treasury will still need to sell bonds to China, whomever, to cover the cash flow shortfall of SS payments. 

https://www.cato.org/blog/social-security-spending-adds-national-debt#:

[Lacessit]

It seems to me when a government starts to talk about privatizing one of its functions, that's code for screwing the people who use it.

[Jingthing]

Just now, Lacessit said:

It seems to me when a government starts to talk about privatizing one of its functions, that's code for screwing the people who use it.

No doubt whatsoever.

 

[impulse]

On 7/26/2025 at 9:39 PM, Jingthing said:

Yes and no. 

Actual last minute would be impossible to fully fix.

Relatively speaking to fully fix it and avoid a cut, we're getting close to the real last minute.

 

They've been saying that for decades.

 

[gamb00ler]

 

1 hour ago, JimGant said:

Ok, this is starting to be stupid. Your insistence on not believing CATO is curious.... It's all pretty simple, actually. I'll once again post this link, for anyone with a brain to analyze. I don't know if CATO is left or right oriented. But their observation in this link makes complete sense. Bottom line: Right now we're borrowing billions in cash to make up the SS cash deficit in receipts vs outgo. Come 2033 -- same picture -- it's irrelevant that in 2033 the Trust Fund is out of IOUs to cash in; the Treasury will still need to sell bonds to China, whomever, to cover the cash flow shortfall of SS payments. 

https://www.cato.org/blog/social-security-spending-adds-national-debt#:

You are the one who seems to be married to the CATO institute and their attempt to mislead those befuddled by the relationship between OASI and the NATIONAL DEBT.  

 

Of course the US is borrowing more CASH from more public purchasers of T-bills.  But that does not change the total national debt because simultaneously the debt to OASI is decreasing by the same amount as the shortfall in SS revenue.  You can clearly see that the OASI total is declining.  How do you suppose that is happening?  The decline in OASI matches exactly the shortfall in income vs benefits paid.

 

What is your theory of how the OASI balance (held in T-bills) is declining?

 

Obviously the portion of the NATIONAL DEBT held by intragovernmental lenders is declining.  The increase in the NATIONAL DEBT is due to the Federal government spending more than its revenue, not because SS spends more than it takes in.

 

You seem to continuously overlook the Antideficiency Act, which makes it illegal to use Federal funds to cover any shortfall in appropriation by SSA.  That makes it impossible for Social Security's shortfall to increase the NATIONAL DEBT.

 

The so called 'public debt' IS increasing... and it is actually increasing FASTER than the more relevant figure that everyone calls the NATIONAL DEBT.  The 'public debt' does NOT include intragovernmental borrowing.

 

[JimGant]

2 hours ago, gamb00ler said:

You are the one who seems to be married to the CATO institute and their attempt to mislead those befuddled by the relationship between OASI and the NATIONAL DEBT.

Sigh. So, you think the folks at CATO have it all wrong -- and you, a Canadian, have it all right? Are you, by the way, French Canadian?

 

 

[ThreeCardMonte]

On 7/26/2025 at 5:31 AM, Knight Rider said:

The committee for a responsible budget predicts SS cut to the tune of $18,000 in seven years. What are American expats planning to do in the future? 

https://www.crfb.org/blogs/retirees-face-18100-benefit-cut-7-years

Ask me in 7 years.

[gamb00ler]

7 hours ago, JimGant said:

Sigh. So, you think the folks at CATO have it all wrong -- and you, a Canadian, have it all right?

 

 

yes.  I've given you the links to the SSA and Treasury web sites that show CATO is wrong.  Would you like to place a wager?

 

What does my country of birth have to do with anything we've discussed?  I lived in US and Canada about the same portion of my life.

 

The simple facts:

- intragovernmental loans are included in the NATIONAL DEBT.

- the 'public debt' is that portion of the NATIONAL DEBT that is owned by private investors (70% of which is owned by US based investors)

- it is the NATIONAL DEBT not the 'public debt' that cannot exceed the debt ceiling

- the balance on these intragovernmental (primarily from OASI) loans has been decreasing since the FICA tax income fell below the SS benefit total

- the NATIONAL DEBT increases due to overspending on the non-SSA departments

- the SSA expenditures are NOT included in the Federal Budget for many years and therefor CANNOT increase the NATIONAL DEBT

- CATO is confusing you by only discussing what is called 'public debt' instead of using the much more realistic total that most others use - the NATIONAL DEBT

- in every post I have clearly stated that I am discussing the NATIONAL DEBT, not the 'public debt'

- CATO is only an opinion based on their flawed interpretation of the data and misplaced priority on the 'public debt'

[gamb00ler]

11 hours ago, JimGant said:

the Treasury will still need to sell bonds to China, whomever, to cover the cash flow shortfall of SS payments. 

The Treasury never has and never will cover shortfalls in funding for SS benefit payments.  It CANNOT because of the Antideficiency Act.  What the Treasury has done is redeem for cash the OASI trust funds T-bill assets.  The cash is then sent to the SS benefit recipients.  Where does the cash come from?  Of course it comes from the sale of T-bills to cash customers.  The debt owed to OASI declines as benefits are paid and simultaneously the debt owed to public T-bill investors ('public debt') rises by the same amount.  The effect on the NATIONAL DEBT is a wash.

 

The term 'public debt' is just a convenient target for GOP supporters like CATO.  It is otherwise a meaningless term that has no bearing on the Federal budget or NATIONAL DEBT.

[gamb00ler]

18 hours ago, JimGant said:

but there would be no noticeable difference in the added Federal deficit -- except now that deficit is only because of a moral obligation, not a legal one. 

An unbelievable statement.  You may be qualified to consider taxation but you're not very good at simple accounting principles.

[gargamon]

It's OK. You won't be getting any social security. At least they won't be any taxes on the social secxurity you won't be getting. Good job MAGA.

[JimGant]

8 minutes ago, gamb00ler said:

The Treasury never has and never will cover shortfalls in funding for SS benefit payments. 

Quote

Since 2010, Social Security has taken in less money from payroll tax revenues and the taxation of benefits than it pays out in benefits, generating cash-flow deficits. Social Security’s estimated 2016 cash-flow deficit was $73 billion. That $73 billion deficit requires $73 billion in new public debt because, although the OASI and DI trust funds are not yet insolvent, there is no real money sitting in them—just a bunch of IOUs. Thus, when the Social Security Administration pays out benefits that exceed its payroll tax collections, the government converts those trust fund IOUs to new public debt. Over the next 10 years, Social Security’s cash-flow deficits will amount to $1.1 trillion, according to the Trustees’ intermediate assumptions.

https://www.heritage.org/social-security/heritage-explains/the-state-social-security

 

The operative phrase is: cash flow deficit equals new public debt. Intragovernmental debt, consisting of paper IOUs, might be germane in some scenarios. But not in the explanation of how debt owed to the public has increased since 2010, due to cash flow deficits. 

 

Sadly, too many people, who should know better -- don't. And by using misleading accounting methods, believe everything's ok until 2034 -- or is it now 2033 -- so they can just sit back and smell the paper IOUs.