How COVID-19 Is Affecting Social Security Benefits, and What to Do about It

Abstract

The economic contraction precipitated by the COVID-19 crisis is causing severe problems in Social Security. These problems include further weakening of Social Security finances, as payroll tax collections plunge during the recession, and a sharp decline in benefits for those eligible to begin collecting Social Security old-age benefits two years from now. To their credit, members of Congress are studying this unfolding crisis, and some are stepping forward with proposed responses. Many of these problems have their roots in Social Security law long predating the COVID-19 crisis, and they are simply being exacerbated or exposed by current conditions. Unfortunately, it is too easy for elected officials to react in a way that makes Social Security’s various problems even worse, as a recently introduced House bill—H.R. 7499, the Social Security COVID Correction and Equity Act—would do. This policy brief explains the latest crises as well as other persistent problems facing Social Security and offers guidance on how to address them.