Trustees Show Limited Time to Save Social Security and Medicare
Today, the Social Security and Medicare Trustees released their annual reports on the state of the trust funds. The Trustees find that Medicare’s Hospital Insurance trust fund will be insolvent by 2026, Social Security’s Old-Age and Survivors Insurance trust fund will run out of reserves by 2033, Social Security’s Disability Insurance trust fund will be depleted by 2057, and the theoretically combined Social Security trust funds will be insolvent by 2034. Upon insolvency, Social Security will be reduced across-the-board by 22 percent under current law.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
13 years – that’s how long seniors have before Social Security and Medicare run out of reserves. We can’t promise full benefits to today’s retirees, let alone our kids and grandkids.
Not only is this year’s outlook worse than in last year’s report, but we’ve lost yet another year from inaction. As the Trustees explain, we should act sooner rather than later to restore solvency to these vital programs.
Acting today, we could fix Social Security with a 27 percent tax increase or 21 percent benefit reduction. If we wait until 2034, those adjustments will have to be about a quarter larger. And there would be little opportunity to phase in changes or give workers the warning they deserve.
Thoughtful reforms can protect and strengthen benefits for those who rely on them, enhance progressivity, lower health care costs, improve our fiscal outlook, and support faster economic growth. Both tax and spending changes should be on the table.
With the economy on course for recovery, it’s time we turn our attention to rescuing Medicare and Social Security so these programs remain financially sustainable for current and future generations.
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