Social Security has 16 years left before benefit cuts begin, report says

Social Security has 16 years left before benefit cuts begin, report says

Social Security has 16 years left before benefit cuts begin, report says

If that doesn't sound dire enough, in their annual report, the Social Security trustees said that Medicare's hospital insurance fund will be depleted in 2026, reserves for the fund that pays disability benefits would be emptied in 2032, and all Social Security reserves would be exhausted by 2034.

The report from program trustees says Medicare will become insolvent in 2026, three years earlier than previously forecast.

The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the USA government to dip into the retirement system's trust fund to pay benefits to participants.

Social Security covers 62 million people, split among retired workers and their dependents, survivors of workers who've died and disabled people.

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The trust fund report attributes the funding drop to lower payroll taxes, caused by lowered wages in 2017, and lowered income from the taxation of Social Security benefits.

For Medicare, insolvency would mean that hospitals, nursing homes and other providers of medical care would be paid only part of their agreed-upon fees.

Both the cost-of-living increase and the Medicare outpatient premium are not officially determined until later in the year, and the initial projections can change. Options include raising the maximum income cutoff for imposing Social Security taxes, now $127,200.

The Cabinet secretaries for Treasury, Health and Human Services, and Labor usually participate in the annual release of the report on Social Security and Medicare, along with the Social Security commissioner, and take questions from reporters. Some 45 million retirees and six million dependents receive Social Security benefits. The public trustees are usually more candid, but those posts remain unfilled.

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The trustees report is considered an annual wake-up call for the beleaguered programs, though consensus around ways to secure their future remains elusive.

President Donald Trump says he won't cut Social Security or Medicare, but hasn't offered a rescue plan for the long run.

Rather than cutting benefits, the Democratic-leaning Social Security Works coalition supports expanding benefits as a solution to the nation's looming retirement crisis by asking the wealthy to contribute more.

The Congressional Budget Office said in April that federal deficits and debt would soar in the coming decade, following passage of the tax overhaul and legislation to increase military and domestic spending.

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Higher deficits would leave less maneuvering room for policymakers when the day of reckoning finally arrives for Social Security and Medicare.

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