The Committee for a Responsible Federal Budget has released a report mapping the “Impact of \u201cSocial Security’s Insolvency\u201d, noting that average monthly benefit cuts could surpass $500 per month in 29 states. Some 63 million Americans, including retirees, spouses, and dependents in the United States benefit from the Social Security\u2019s retirement program.<\/p>\n
\u201c\u2026 For the last 16 years, the cost of Social Security<\/a>\u2019s retirement program has exceeded its cash income, forcing it to pay benefits in part by using its trust fund reserves. The Social Security Trustees now project that the retirement trust fund will be exhausted in 2032, less than seven years from today,\u201d the report warned.<\/p>\n Also Read | Petrol, diesel prices on June 4: Check fuel cost in Delhi, Mumbai, other cities<\/a><\/p>\n Incorporated on 10 June 1981, the Committee for a Responsible Federal Budget is a non-partisan, non-profit organisation which publishes on issues with significant fiscal policy<\/a> impact.<\/p>\n Why could benefits be cut? Who will be impacted?<\/p>\n The report noted that by law, the US social security program cannot pay out more in benefits than it receives in revenue<\/a>, and all retirees are \u201cprojected to be subject to an immediate 24% benefit cut upon trust fund exhaustion\u201d.<\/p>\n In real-world terms, a 24% cut would mean reduction in payout by over $500 per month in as many as 29 of the 51 US states.Beneficiaries in Connecticut, Delaware, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, Utah, and Washington <\/a>could see the biggest impact.Also Read | Dearness Allowance: DA hikes, arrears, pay commission decisions \u2014 Latest updates<\/a>Over 15% of citizens would be directly impacted in 47 states, with the largest share of the population impacted in Delaware, Maine, Michigan, Montana, New Hampshire, Pennsylvania, South Carolina, Vermont, West Virginia, and Wisconsin.Total benefit cuts would exceed 1% of GDP <\/a>in 40 states, with the largest economic impact in Alabama, Arkansas, Idaho, Maine, Michigan, Mississippi, Montana, South Carolina, Vermont, and West Virginia.<\/p>\n \u201cNo state would be spared from the potentially devastating effects of insolvency. With less than seven years until Social Security is projected to be insolvent, policymakers need to enact changes to the program as quickly as possible to protect against these scenarios,\u201d the report added.<\/p>\n Social security benefit cuts: How much could Americans lose?<\/p>\n If Social Security becomes insolvent as estimated by 2032, retirement <\/a>benefits would need to be cut by around 24%. \u201cWe estimate an across-the-board monthly cut would range from $459-556 across the 50 states and the District of Columbia,\u201d the report added.<\/p>\n Also Read | 8th pay commission: Srinagar meet today, check dates for Ladakh, UP, Bengal here<\/a><\/p>\n Notably, monthly social security<\/a> cheques usually range from $1,500 to $4,000 based on lifetime earnings. Thus, over $500 per month cut across the board irrespective of payout amount could especially severely impact spending power of beneficiaries in the lower ranges.<\/p>\n Nationally, the average monthly cut would total $500, which is more than what the average retired household spends on groceries <\/a>each month.In 29 states, the cut would exceed $500 with retirees in Connecticut, Delaware, Maryland, New Hampshire, and New Jersey facing the largest monthly reductions.Top 10 States: Average Monthly Benefit CutRankStateAverage Monthly Benefit Cut1Connecticut$5562New Jersey$5543New Hampshire$5534Delaware$5495Maryland$5416Washington$5317Minnesota$5308Massachusetts$5279Michigan$52310Utah$523\u2014National Avg.$500Source: Committee for a Responsible Federal Budget and Social Security AdministrationKey highlights: Potential impact of social security cuts<\/p>\n Share of population impacted by state: One-in-five Americans, i.e. 63 million will be impacted if Social Security\u2019s retirement program<\/a> faced a 24% cut today. This includes 54 million retired workers and 9 million survivors and dependents.<\/p>\n Between 10% and 23% of each state\u2019s population would be affected by the cut, with the largest share facing benefit cuts in Maine, West Virginia, Vermont, Delaware, Montana, and New Hampshire.<\/p>\n Total benefits lost by US: At the national level, a 24% reduction in Social Security benefits <\/a>today would amount to $345 billion this year, or 1.1% of GDP \u2013 with the state impact ranging from 0.2% to 1.9% of GDP.<\/p>\n Also Read | EPFO 3.0 ATM withdrawal explained: Launch status, PF withdrawal process, rules<\/a><\/p>\n Total benefits lost by the states: In 40 states, the cuts would exceed 1% of GDP with West Virginia, Mississippi, and Vermont facing the steepest losses, followed by South Carolina and Maine. States that would be the most impacted are those that have older populations<\/a> and lower per-person incomes.<\/p>\n