Medicare and Social Security Trust Funds on path to depletion… likely sooner than anticipated.

Inaction by Congress for many years has gotten us to this point.

Press release.

Committee for a Responsible Federal Budget.

The Social Security and Medicare Trustees released their annual reports today showing that, before accounting for the COVID-19 pandemic, the Medicare Part A trust fund will be insolvent in just 6 years and the Social Security trust funds in 15 years. After accounting for the sharp economic downturn caused by the pandemic, the trust funds are likely to run out of reserves much sooner.

Below is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

This crisis we are living through is a painful reminder of how important it is to have a reliable safety net. Both Social Security and Medicare face major financing challenges that we need to address. Once we get through the current economic and public health crisis, we’re going to need a rescue package to save them.

Even without the pandemic, the Trustees project the Medicare Hospital Insurance program will run dry in 2026 and the Social Security funds in 2035. That means Social Security would be insolvent when today’s 52-year-olds reach the normal retirement age and today’s youngest retirees turn 77.

And when Social Security’s trust fund runs out, beneficiaries of all ages and all income levels—including the most vulnerable—will face a 21 percent across-the-board benefit cut.

Once the Trustees incorporate the effects of the current crisis on payroll tax revenue and other factors, the situation will go from bad to worse. The Medicare Hospital Insurance and Social Security Disability Insurance funds may run out in just a few years, and Social Security’s old age trust fund won’t be far behind.

It’s time for policymakers to stop kicking the can and start taking the finances of these programs seriously. Tens of millions of seniors and disabled workers are counting on them to come together on a bipartisan basis to save Social Security and Medicare.

After the coronavirus pandemic is under control and the economy has stabilized, that should be at the top of the legislative agenda.

Click here to read our preliminary analysis of the Trustees’ report.

3 comments

  1. All presidents have contemplated changes to Social Security over the last few years and the pushback has become severe! Poor leadership from our State Senators and Legislators! NIMBY!

    Like

    1. It’s not a matter of making changes to SS, it’s a matter of not having the courage to pay for the promises made to multiple generations. The taxes should be adjusted each year to assure the trust remains solvent. Most people don’t want to hear that.

      Like

  2. I know this forum focuses on retirees and that their entitlements might be cut. I worry about the future retirees. With the expanded coverage and extra strain that this pandemic has caused on the medicare fund, I worry about how much they will have to raise the taxes on future workers to stabilize these funds. Then there is paying back all this stimulus. We are going to be taxed at a socialist country rate without all the benefits(?) of a nanny state. People retiring in the 2030s & 2040s are going to have the rug pulled out from under them if they are still following the retirement planning assumption of the late 1990s and early 2000s. The world has change for a 3rd time in two decades.

    Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s