Why the Social Security Shortfall Is Coming Sooner
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What recent event involving President Trump and Iran is discussed?
President Trump says the U.S. must respond after Iran downed a U.S. Apache helicopter near the Strait of Hormuz. Plus, the fund that helps pay for Social Security benefits is now expected to run out even earlier. And Anthropic releases its latest AI model, giving the public access to a tool that has spooked companies and the White House.
Anthropic announced this new technology, and then they said, it's too dangerous to be released publicly. Naturally, that's going to get everybody's attention.
The company says this model protects against those dangerous capabilities. It's Tuesday, June 9th. I'm Alex Oceleff for The Wall Street Journal.
Why is the Social Security trust fund projected to run out earlier?
This is the PM edition of What's News, the top headlines and business stories that move the world today. President Trump has accused Iran of shooting down a U.S. Apache helicopter near the Strait of Hormuz and says the U.S. must respond. The development threatens to shatter a fragile ceasefire between Iran and the U.S. The downing of the helicopter late yesterday set off a race to find the two American crew members before Iranian forces could close in on them. The military says that in a first-of-its-kind operation at sea, a drone boat rescued the crew, who had spent two hours in the water off the coast of Oman. Iran didn't deny that it shot down the helicopter, but the country's foreign minister suggested that taking it down had been an accident.
And NASA has chosen four astronauts for its next Artemis mission as it prepares for a moon landing in 2028. There is Mission Commander Randy Bresnik, a retired Marine Corps colonel who became a NASA astronaut in 2004. Also coming on the mission are Andre Douglas, who served in the Coast Guard as a naval architect, Frank Rubio, who once spent more than a year aboard the International Space Station, and Luca Parmitano, who's representing the European Space Agency. Artemis 3 won't take them to the moon or around it as the previous flight did. Instead, it will test hardware and vehicles that NASA intends to use for the eventual moon landing. Their flight is expected to launch next year. It will spend about two weeks in low-Earth orbit.
If you're American, you may already know that the fund that pays out Social Security is expected to be depleted within the next decade. Social Security's trustees said today that the deadline is actually coming a few months earlier than they had previously projected. Now it'll be in late 2032. Ann Tergesen, who covers retirement and personal finance for the journal, says there are a few reasons why the shortfall is coming earlier.
The tax cuts that Congress passed last year means that a lot of Social Security beneficiaries are not paying as much tax on their Social Security benefits. And so that tax revenue is declining. And both fertility rates are declining and also immigration. Those declines mean that there are projecting fewer numbers of workers who are going to be paying into the system in the future. And that means less revenue for the Social Security trust funds.
But Ann says there's no need to panic quite yet that the fund only pays for a portion of the overall Social Security benefits.
The payroll taxes that come in don't cover 100% of the benefits that have been promised. So we have to draw down on the trust fund, which is like a savings account that Social Security has amassed. That trust fund will be depleted at some point in 2032. People who are receiving benefits are still going to get their benefits. In a worst-case scenario, they're going to get about 78% of their promised benefits because that's what the Payroll tax will cover. There will be no Social Security trust fund to make up the difference. That is one source of serious alarm for people is that when they hear that the trust fund is going to be depleted, they think that all of their benefits are going to go away and that that's not the case.
I think Congress is likely to come up with some kind of funding system to avert a situation in which 22% of Social Security benefits just disappear overnight.
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