The CBO estimates that tax revenues would need to increase by 2.6 percentage points just to match the outlays for 2021.

However, вЂњdoing nothing to address Social SecurityвЂ™s solvency is not an option,вЂќ she said. The Social Security trust fund is expected to take in $823 billion in 2021, while expenditures are projected by the Congressional Budget Office to be $949 billion in 2020, she noted. This makes BidenвЂ™s plans to increase Social Security benefits and improve the COLA more challenging, she said. She also sees a significant drop in the payroll tax revenue that funds Social Security and Medicare Part A Hospital Insurance. She expects that continued low inflation will mean the 2022 COLA will also be low, despite price jumps in various household expenditures such as some food, home repair supplies and services and Medicare supplemental insurance. Mary Johnson, The Senior Citizens League Social Security and Medicare policy analyst, had several predictions. вЂњIf Republicans block it, Democrats will have a major campaign issue in 2022вЂќ during midterm elections. вЂњEither a Democratic expansion bill will be enacted or Senate Republicans will block it,вЂќ she said. One reason: The need to fix the вЂњnotchвЂќ will force action on Social Security. Altman, president of the advocacy group Social Security Works, predicts that вЂњthe legislation to expand Social Security will be voted out of the in the next Congress and could even get signed into law.вЂќ She also says progress is likely on expanding Medicare.

вЂњWe also are pressing lawmakers to lessen the burden on workers who are required to repay payroll taxes deferred by an executive order from President Trump last summer,вЂќ he said. Social Security benefits are based on a workerвЂ™s 35 highest years of earnings, which are then indexed to the growth in average wages until the year the worker turns 60.В However, those who turned 60 in 2020 could see benefits reduced due to the economic downturn and a drop in the index. Richtman added that his group hopes Congress will at least fill the вЂњnotchвЂќ in Social Security benefits for workers who turned 60 in 2020. However, he said, вЂњ Social Security legislation is going to be a heavier lift in the Senate, where any changes in the law require a minimum of 60 votes.вЂќ The вЂNotchвЂ™ Likewise, Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, an advocacy group, said the House of Representatives was вЂњlikely to take action on Social Security in the 117 th Congress,вЂќ especially as thereвЂ™s a вЂњsignificantвЂќ overlap between President-elect Joe BidenвЂ™s proposal and the Social Security 2100 Act, sponsored by Rep. вЂњTherefore, itвЂ™s probably not exactly something that would be regarded as a top priority among many Americans and not something immediately addressed.вЂќ вЂњEither itвЂ™s going to entail cutting benefits, raising taxes, waiting to get benefits longer, or likely some combination of those, but thereвЂ™s going to be a decent amount of pain spread across some relatively large number of U.S. вЂњEvery year (or day) we, as country, wait to address the issue, the more expensive fixing it becomes, but whatever the fix is, it isnвЂ™t going to be easy (or painless),вЂќ he said. MorningstarвЂ™s head of retirement research, David Blanchett, who alsoВ provided predictions on the future of retirement income planning, told ThinkAdvisor that he believes the Biden administration will look to fund gaps in both programs, but due to the pandemic and its economic effects, heвЂ™s not sure thereвЂ™s going to be the political will to enact any changes. We asked several experts their thoughts on what could be expected about Social Security and Medicare next year, other than the planned 1.3% cost-of-living adjustment. The Medicare Part A hospitalization trust fund could run dry in 2024.ДЄs more baby boomers retire and claim Social Security, the worries about the federal program grow, especially in the midst of the coronavirus pandemic, slowing economy and fewer people workingВ to help pay for the program.A change in the benefits formula could slash their benefits.One immediate concern is the fate of Americans born in 1960.

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