WASHINGTON — As millions of baby boomers flood Social Security with applications for benefits, the program’s $2.7 trillion surplus is starting to look small.
For nearly three decades Social Security produced big surpluses, collecting more in taxes from workers than it paid in benefits to retirees. The surpluses also helped mask the size of the budget deficit being generated by the rest of the federal government.
Those days are over.
Since 2010, Social Security has been paying out more in benefits than it collects in taxes, adding to the urgency for Congress to address the program’s long-term finances.
‘‘To me, urgent doesn’t begin to describe it,’’ said Chuck Blahous, one of the public trustees who oversee Social Security. ‘‘I would say we’re somewhere between critical and too late to deal with it.’’
The Social Security trustees project the surplus will be gone in 2033. Unless Congress acts, Social Security would only collect enough tax revenue each year to pay about 75 percent of benefits, triggering an automatic reduction.
Lawmakers from both political parties say they want to avoid such a dramatic benefit cut for people who have retired and might not have the means to make up the lost income. Still, that scenario is more than two decades away, which is why many in Congress are willing to put off changes.
The projected shortfall in 2033 is $623 billion, according to the trustees’ latest report. It reaches $1 trillion in 2045 and nearly $7 trillion in 2086, the end of a 75-year period used by Social Security’s number crunchers because it covers the retirement years of just about everyone working today.
Social Security Commissioner Michael J. Astrue said he is frustrated that little has been done to solve a problem that is only going to get harder to fix as 2033 approaches.
If changes are done soon, they can be spread out over time, perhaps sparing current retirees while giving workers time to increase their savings.
Social Security’s finances are being hit by a wave of demographics as aging baby boomers reach retirement, leaving relatively fewer workers behind to pay into the system. In 1960, there were 4.9 workers paying Social Security taxes for each person getting benefits.
Today, there are about 2.8 workers for each beneficiary, a ratio that will drop to 1.9 workers by 2035, according to projections by the Congressional Budget Office.
About 56 million people collect Social Security benefits, and that is projected to grow to 91 million in 2035. Monthly benefits average $1,235 for retired workers and $1,111 for disabled workers.Stephen Ohlemacher writes for Associated Press.