Yesterday, the Social Security and Medicare Trustees released their annual reports. For the first time since 1982, Social Security costs will exceed its income, dipping into its $3 trillion trust fund.
The report held its assumption that in 2034, the program would only be able to pay out about three-quarters worth of benefits, but accelerated its insolvency projection for the disability portion of the Social Security program to 2032, five years earlier than was expected last year. The Medicare Trustee report projects Medicare’s hospital insurance fund will be depleted in 2026, three years earlier than anticipated last year.
— Marc Goldwein (@MarcGoldwein) June 6, 2018
Among the drivers for the accelerated cost of the program are America’s aging population and rising healthcare costs. As Pursuit has stated before, there are simply not enough workers to cover the number of Social Security beneficiaries. In 1945, there were 42 workers per beneficiary, now that number is less than three. In addition, when President Franklin Delano Roosevelt signed Social Security into law in 1935, average life expectancy was 64 and the earliest retirement age in Social Security was 65. Today, Americans on average live 14 years longer, retire three years earlier, and spend 20 years in retirement.
— Fix the Debt (@FixtheDebt) June 5, 2018
The future cost of our entitlement programs, Social Security and Medicare included, is expected to greatly exceed future tax revenues, by about $110 trillion. Meaning reform is inevitable. The only question is whether we will do it in an orderly and fair manner on our terms, or will it occur in the midst of a crisis on someone else’s terms.
By all means, let’s keep focusing on the NFL, NBA, Roseanne Barr, and Samantha Bee in the political arena. Meanwhile, Medicare and Social Security are going bankrupt, and we’ll destroy any politician who suggests doing anything about it.
— Ben Shapiro (@benshapiro) June 5, 2018
According to the Trustee’s report, in order for the Social Security Trust Funds to remain fully solvent throughout the 75-year projection period, payroll taxes would need to be increased 2.78 percent to 15.18 percent, or benefits would need to be reduced by about 17 percent, or 21 percent if applied only to those eligible for benefits in 2018 or later, or a combination of the two.
The report also reminds Congress that the longer it waits to act, the more the burden falls on millennials and generation Z. “If actions are deferred for several years, the changes necessary to maintain Social Security solvency become concentrated on fewer years and fewer generations.”
While there are many individual reforms that many Members of Congress like, in order to guarantee the program’s survival, comprehensive reform will be required. But in order to get the ball rolling, leaders in Washington will have to come together, instead of pointing the finger.
As the Trustees’ report shows, the #GOPTaxScam is already robbing & weakening Medicare & Social Security to cover tax breaks for the wealthy & biggest corps. Despite @realDonaldTrump‘s campaign promises, the GOP policies will strip away the benefits America’s seniors earned. https://t.co/97iV05glYs
— Chuck Schumer (@SenSchumer) June 5, 2018
It was a privilege to join @RepEliotEngel to tour the @RiverSpringHlth campus in his district today & visit with residents. America’s seniors have worked hard to earn their retirement. We must protect their Medicare & Social Security from threats brought by the #GOPTaxScam. pic.twitter.com/tUum7TIvpX
— Nancy Pelosi (@NancyPelosi) June 5, 2018
Unfortunately, Republican leaders Paul Ryan and Mitch McConnell didn’t tweet anything. It could be because their promise of fiscal responsibility went out the window this year.
The Senate just voted down @RandPaul‘s balanced budget plan 21-76. We’ll soon hit $1 trillion deficits and our leaders have ZERO plans to address our serious debt problems. #OurPursuit #PennyPlan https://t.co/klCZMY5ymW
— Pursuit (@PursuitHQ) May 17, 2018
Until Congress conjures up the political courage to tackle this tough, but necessary issue, we can expect to see future trustee reports telling us the insolvency dates are creeping closer and closer. Will Congress leave entire generations to pay for their mistakes? Only time will tell.