Social Security retirement trust fund will be depleted by 2023 due to a permanent payroll tax cut, warned the agency's chief actuary.

Payroll tax cut can also affect the agency's disability insurance fund, said the Social Security Administration in a report from The Hill.

Social Security Chief Actuary Stephen Goss estimated that the program's funding will be used up by mid-2023 if a permanent tax cut was put in place. That is based on the change taking effect for earnings starting January 1 next year, reported CNBC.

President Donald Trump has put payroll tax on hold. It was an effort to help boost the American economy amid the coronavirus pandemic.

He signed an executive order letting companies to stop withholding payroll taxes for their workers' pay checks. The action was signed on August 8 and applies to those earning less than $104,000, reported Fox Business.

But he also went a step further and said he will cancel the tax altogether if he were to be reelected in November.

Cutting off payroll tax means workers can bring home bigger pay check. But this raises worry in the agency that relies on those taxes.

If the agency loses revenue sources, the programs it has will have to stop paying out benefits once funds are depleted.

Payroll Tax Cut Gains Little Support

The analysis done at the request of four Democratic senators, said a CNN report. They asked to run the numbers when Trump said he would take it off altogether if he's reelected.

Only Congress can eliminate the payroll tax and the move did not gain a lot of support from either party on Capitol Hill. With that, it is unlikely to push through.

Congress believes cutting payroll tax would do nothing to help the millions of Americans out of work.

They may need money to face the pandemic but they are not getting paychecks as many were laid off work.

While Social Security believes they will be affected greatly by payroll tax cuts, Trump thinks otherwise. He countered the worries by saying the money would be shifted from the government's general fund. That will also require an act of Congress.

Taking money from the general fund has been done before. When the Congress cut the payroll tax under President Barack Obama, it reimbursed the agency's trust fund out of general revenue.

But the tax cut was only temporary and only reduced the rate than taking it out altogether.

It still reduced federal tax revenue by about $227 billion for two years, said Congressional Research Service.

The analysis was not based on a hypothetical legislation that would take money from the general fund.

How Soon Will Funds Run Out?

As Goss estimated, Old-Age and Survivor Insurance (OASI) Trust Fund would permanently run out at that time. There will be no payable benefits at that point.

The OASI is used to pay benefits to retired workers and their families. It also pays survivors of deceased workers.

On the other hand, the Disability Insurance (DI) Trust Fund will run out by mid-2021, Goss estimated. There will be no money to pay benefits at that point.

The DI is used to pay disabled workers who qualify for benefits.

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