E-Paper
Will Social Security benefits be cut? Funding gap jumps $10.1T
Federal data reveals a $10.1 trillion rise in the US social safety net's funding gap, raising alarms about its long-term stability.
Warnings about the long-term stability of the US social safety net are intensifying after new federal data revealed a sharp spike in funding gaps. A Fortune analysis of government financial statements found that the country’s 75-year unfunded social insurance obligation rose by $10.1 trillion in just one year: from $78.3 trillion in fiscal 2024 to $88.4 trillion in 2025.
The figure shows the widening gap between projected payouts and expected revenue under current law, putting pressure on policymakers.
Why it matters
Programs overseen by the Social Security Administration support more than 70 million Americans, including retirees, people with disabilities and survivors. As the funding gap grows, experts warn that tough decisions, such as benefit cuts, higher payroll taxes or raising the retirement age, could be unavoidable.
Also Read: America in reverse: First time in decades, more people leaving US than arriving
Social Security and Medicare driving rise
A notable portion of the increase is linked directly to Social Security, whose projected shortfall rose by $2.5 trillion year-over-year, according to the report.
However, the largest contributor to the overall surge was Medicare Part B, which accounted for a $6.9 trillion jump. Together, these programs make up the bulk of the long-term imbalance.
Experts warn of potential reductions
Financial analysts say the issue is not whether benefits will stop, but whether they will shrink.
Kevin Thompson, CEO of 9i Capital Group, told Newsweek, “If nothing changes, you’re likely looking at a 20–30 percent haircut once the trust fund runs dry.”
Also Read: Why Social Security COLA might be bigger than expected in 2027
He added that demographic trends are worsening the situation, with more people drawing benefits, fewer consistently contributing and longer life expectancies stretching the system beyond earlier projections.
What’s driving the pressure
Alex Beene of the University of Tennessee at Martin said rising healthcare costs and policy changes are also playing a role.
Increased spending on outpatient care and physician-administered drugs has pushed Medicare projections higher, while expanded eligibility has added more Social Security beneficiaries.
What happens next
Under current law, full benefits will continue until trust fund reserves are depleted. After that, automatic cuts could take effect unless Congress steps in.
