Social Security this year will spend more than it takes in, the program’s trustees said in a new report Tuesday that signals the official beginning of the program’s slide into insolvency. Medicare’s main trust fund will also run out of money sooner than anticipated, with insolvency looming in 2026, or three years earlier than last year’s projection, the trustees said. The twin warnings come as Congress has cut revenue and boosted spending — moves that, analysts say, will leave the government’s finances struggling for years to come. The problems in the entitlement programs only add to those woes. For Social Security, the last time the program ran an annual deficit was in 1982, before President Reagan signed changes that set it on firmer footing for the next 30 years. But the aging population and shrinking percentage of people in the workforce has finally swamped those fixes, posing tough questions Congress and the White House have ignored for years. The combined Social Security trust funds are slated to run dry in 2034, and that will force benefits to be cut more than 20 percent. Medicare’s hospital insurance fund, meanwhile, will become insolvent by 2026, or three years sooner than projected last year. “As in past years, the trustees have determined that the fund is not adequately financed over the next 10 years,” the report said, citing in part lower payroll taxes collected on lowered wages in 2017 and rising hospital spending. 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 Trump pledged during the 2016 campaign to leave Social Security and Medicare benefits untouched, putting him on a crash course with Republicans on Capitol Hill who have said they wanted to tackle the programs’ problems by limiting future benefit increases. Many Democrats, meanwhile, argue the problem is that the programs aren’t generous enough. They have called for increasing spending, which they would pay for with major tax increases, particularly on higher-income Americans. Social Security covers 62 million people, split among retired workers and their dependents, survivors of workers who’ve died and disabled people. Medicare, a federal heath insurance program, covers nearly 60 million Americans, mostly seniors but some disabled Americans. Treasury Secretary Steven Mnuchin said the programs “remain secure” in the near term. “However, certain long-term issues persist,” he said. “Lackluster economic growth in previous years, coupled with an aging population, has contributed to the projected shortages for both Social Security and Medicare. The secretary bet that Mr. Trump’s program of deregulation and tax cuts will produce enough economic growth to place the programs on a more sustainable path. “Social Security and Medicare are the federal government’s two largest programs, and millions of Americans heavily rely on their benefits,” Mr. Mnuchin said. “Robust economic growth will help to ensure their lasting stability.”
Let’s hope so. However, as those of us who have served in the military oftentimes say…”hope is NOT a plan.” The problem is that the major political parties have historically kicked the can down the road with the Dems always arguing for more and more higher taxes (FAIL!)…and Republicans arguing for cutting benefits for those who have been paying into the system under the impression of certain promises (mostly FAIL!). There is a saying that the definition of insanity is doing the same thing over and over and expecting a different result. Such is the case here. One such thought is an idea floated by then Pres. George W. Bush to privatize SOME (not all) of the investment portfolios for person’s social security act. At the time, the numbers were run and it made a ton of sense. Unfortunately, the establishment “swamp” in DC wouldn’t even consider it. Well, maybe NOW is the time to consider such an idea, and allow the OPTION for folks (especially younger tax payers) to put some of their social security acct dollars into a private fund where it could earn a higher interest rate, etc. It’s time to think outside the box and consider such ideas. Waiting for the these programs to become insolvent is criminal, and we should put our federally elected officials on notice to get off their collective butts and address this issue once and for all.