By Mark Tapscott
Social Security will be unable to pay full benefits a year earlier than previously projected, while Medicare’s insolvency date remains just five years away, according to the latest trustee reports.
But nobody in the nation’s capital is stepping up with proposals to fix the two largest federal entitlement programs.
Between them, Social Security and Medicare consume nearly $2 trillion annually to pay retirement and hospitalization benefits depended upon by millions of Americans. Those benefits consume 29 percent of all federal spending, according to USASpending.gov.
The cost of benefits are rising faster than the available funds to cover them—tax revenues, individual premiums and trust funds—with the result that, absent any reforms, Medicare insolvency is projected for 2026 and Social Security’s for 2033, according to the reports made public Aug. 31.
Senate Finance Committee Chairman Ron Wyden (D-Ore.) released a statement Wednesday about the dire fiscal conditions of the two programs.
“According to the report that came out today, the Social Security trust fund will be depleted a year earlier than last projected. That means workers in the future will take a 25 percent cut in benefits, even though they’ll still be contributing to Social Security with every single paycheck,” Wyden said.
“And while the projected depletion of the Medicare Trust Fund remains unchanged from last year’s report, this provides cold comfort to the millions of Americans who rely on the Medicare program for their health care. Congress must work hand in hand with President Biden to ensure that Medicare and Social Security will keep the promises made to workers, seniors and people with disabilities to ensure a dignified retirement and high-quality health benefits,” the Oregon Democrat said.
House Ways and Means Committee Chairman Stephen Neal (D-Mass.) also took note of the trustees’ reports, saying, “throughout the tumult of the past year and a half, the promise and support of Social Security and Medicare remained constant.
“In the depths of the COVID crisis, these earned benefits helped families stay afloat and ensured access to health care. Democrats remain committed to preserving and strengthening these vital programs so that Americans never have to worry about losing the critical economic security they provide.”
Spokesmen for neither Wyden nor Neal responded to The Epoch Times’ request for comment on how the two officials would approach fixing Social Security and Medicare.
On the Republican side, the spokesman for Rep. Kevin Brady, the Texas Republican who is the Ranking Minority Member of Neal’s panel, was also unavailable for comment.
Sen. Mike Crapo of Idaho, the top GOP member of Wyden’s committee, did not offer a statement specifically addressing the reports, but he issued a letter to the Government Accounting Office (GAO) several days before concerning their chronically late release in recent years. Federal law requires the annual reports be delivered to Congress in April.
“I urge GAO to continue monitoring the trustees report development process and lack of adequate notification to Congress specifically identifying when trustees’ reports are expected to be delivered to Congress by the Managing Trustee.
“To date, the notification process is at best woefully inadequate and at worst almost casually indifferent to the important information contained in the trustees reports regarding the financial status of the funds, which are currently facing eventual exhaustion.”
Outside of Congress, think tank experts and other reform advocates emphasized the narrowing window of opportunity to address long-standing problems with Social Security and Medicare.
“It makes no sense that we allow programs as essential as Social Security and Medicare to remain on such shaky and uncertain fiscal ground,” said Michael Peterson, Chief Executive Officer of the Peter G. Peterson Foundation, which focuses on federal financial reform.
“There are many, well-known solutions available and it is fully within our lawmakers’ control to put these programs on a more sustainable path. Failure to do so is both irresponsible and unfair to the millions of Americans who rely on them, especially those counting on these programs in the future,” Peterson said.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, pointed to the basic dilemma facing policymakers, noting that, “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.”
And Chris Edwards, Director of Tax Policy Studies at the Cato Institute, told The Epoch Times that, “the coming insolvency dates of Social Security and Medicare should prompt Congress to cut rapidly growing benefits, but I fear the politicians will likely just bail out the programs by issuing even more bond debt to cover the growing shortfalls. The losers will be young Americans in the future with rising tax burdens and the overall economy if the debt triggers an economic crisis and recession.”