We Can't Blame Social Security's Financial Woes on COVID-19 -- but We Can't Use the Pandemic to Ignore Its Problems
The economic impact of COVID-19 has been extreme since cases started multiplying domestically in March. Not only has the pandemic shuttered over 100,000 small businesses and sent unemployment levels spiking, but it's already impacted one key social program that millions of seniors rely on today and millions more will rely on in the future.
We're talking about Social Security, and it's hard to gloss over the damage COVID-19 has done to it. Over the past three months, high unemployment has deprived Social Security of much of its primary revenue stream -- payroll taxes.
Currently, wages of up to $137,700 per year are subject to Social Security taxes, whereas unemployment benefits are not. The problem is that somewhere in the ballpark of 40 million workers have lost their jobs in the course of the pandemic, and those people and their employers haven't been liable for the payroll taxes that keep Social Security afloat. And if the recession we're currently in continues well into 2021, Social Security's financial situation could go from "bad" to "dire."
Source Fool.com
