Report: Eight Michigan counties among most vulnerable to Social Security cuts

By Elyse Apel
The Center Square

More than one in five Michigan residents could see their Social Security benefits reduced by 2032 if Congress fails to address the program’s looming insolvency.

This is according to a new report from the Committee for a Responsible Federal Budget.

The report, “No State Spared: Mapping the Impact of Social Security’s Insolvency,” examined the potential effects of benefit reductions if Social Security’s retirement trust fund is exhausted.

Currently, roughly 63 million Americans receive benefits through Social Security’s retirement program, including retirees, spouses and dependents.

According to the latest report from the Social Security Board of Trustees, the Old-Age and Survivors Insurance Trust Fund is projected to be depleted in 2032.

Under current law, once the trust fund is exhausted, benefits would automatically be reduced. The Committee for a Responsible Federal Budget estimates that would result in an immediate 24% across-the-board benefit cut for all Americans receiving Social Security.

For Michigan, the impact could be substantial and even higher than in many other states.

The report estimates that 19.8% of Michigan’s population – or more than 2 million Michiganders – would be directly affected by the reductions. Retirees in Michigan could see average monthly benefits reduced by $523, the ninth-largest projected cut among all states. That is $23 higher than the national average of $500.

Researchers also estimate that benefit reductions would remove the equivalent of 1.6% of Michigan’s gross domestic product, making it the sixth-largest economic impact nationwide and 0.5% higher than the national average.

Nationally, the report estimates the reduction in benefits would reduce payments by $345 billion in a single year. The committee is calling for legislators to act.

“No state would be spared from the potentially devastating effects of insolvency,” the report states. “With less than seven years until Social Security is projected to be insolvent, policymakers need to enact changes to the program as quickly as possible.”

A separate analysis released by SmartAsset found that some Michigan communities could be particularly impacted to any reduction in benefits.

According to that report, eight of the nation’s 20 counties most dependent on Social Security income are located in Michigan.

Montmorency County ranked first in the nation, with Social Security benefits accounting for 18.6% of all personal income earned in the county. The county has 4,525 Social Security beneficiaries.

Other Michigan counties appearing in the top 20 included Roscommon, Alcona, Ontonagon, Presque Isle, Oscoda, Lake and Ogemaw counties.

“Parts of the U.S. are highly dependent on the benefits their residents receive from Social Security, meaning any reduction could have an outsized impact on local economies,” SmartAsset researcher Toby Nelson told The Center Square in an interview.

Nelson said Social Security serves not only as a critical source of income for retirees but also as an important economic driver in many communities.

“Michigan has several counties where retirement income is structurally important to the local economy,” Nelson said. “Social Security cuts may not just affect retirees, but also the businesses that depend on their spending in these areas.”

Nelson added that spending by retirees—often funded by Social Security—helps support local businesses, jobs, and tax revenue.

“If their income is reduced, the effects could ripple beyond beneficiaries to restaurants, retailers and other employers that depend on consumer spending,” he said.

While the reports highlight the potential impacts of cuts to Social Security, Nelson emphasized that projected benefit reductions are not yet guaranteed.

“A 22% cut in Social Security benefits in 2032 is possible, but not inevitable,” Nelson said. “This analysis highlights areas that may most acutely feel an impact if lawmakers fail to act.”