CRS – Social Security: What Would Happen If the Trust Funds Ran Out? Noah P. Meyerson,  Analyst in Income Security. August 28, 2014. “The Social Security Trustees project that, under their intermediate assumptions and under current law, the Disability Insurance (DI) trust fund will become exhausted in 2016 and the Old-Age and Survivors Insurance (OASI) trust fund will become exhausted in 2034. Although the two funds are legally separate, they are often considered in combination. The trustees project that the combined Social Security trust funds will become exhausted in 2033. At that point, revenue would be sufficient to pay only about 77% of scheduled benefits. If a trust fund became exhausted, there would be a conflict between two federal laws. Under the Social Security Act, beneficiaries would still be legally entitled to their full scheduled benefits. But the Antideficiency Act prohibits government spending in excess of available funds, so the Social Security Administration (SSA) would not have legal authority to pay full Social Security benefits on time. It is unclear what specific actions SSA would take if a trust fund were exhausted. After insolvency, Social Security would continue to receive tax income, from which a majority of scheduled benefits could be paid. One option would be to pay full benefit checks on a delayed schedule; another would be to make timely but reduced payments. Social Security beneficiaries would remain legally entitled to full, timely benefits and could take legal action to claim the balance of their benefits. To delay insolvency of the DI trust fund, Congress could effectively transfer funds from the OASI to the DI trust fund, for example by increasing the share of Social Security payroll tax revenues that are credited to the DI trust fund. Such action would hasten the insolvency of the OASI trust fund, however. Maintaining financial balance after trust fund insolvency would require substantial reductions in Social Security benefits, substantial increases in income, or some combination of the two. The trustees project that following insolvency of the combined funds in 2033, Congress could restore balance by reducing scheduled benefits by about 23%; the required reduction would grow gradually to 27% by 2088. Alternatively, Congress could raise the Social Security payroll tax rate from 12.40% to 16.2% following insolvency in 2033, then gradually increase it to 17.3% by 2088. To maintain balance in later years, larger benefit reductions or tax increases would be required.”