A summary of the 2018 reports by the Social Security Administration says that the Social Security trust fund will run out of money in 2034 while the Medicare Hospital Insurance Trust Fund will run out in 2026.
The report detailed the “long-term financing shortfalls under currently scheduled benefits and financing” of Social Security and Medicare. Forty-two percent of Federal program expenditures were spent on the two programs in the fiscal year 2017.
The HI Trust Fund is one of the Medicare program’s two trust funds. It helps elderly and disabled people pay for hospital and home health services as well as hospice care. The trust fund’s ratio is currently below 100 percent of annual costs and will continue to decline until its depletion in 2026.
“Over the program’s 83-year history, it has collected roughly $20.9 trillion and paid out $18 trillion, leaving asset reserves of $2.9 trillion at the end of 2017 in its two funds,” Social Security Administration trustees wrote about the Social Security trust fund.
Additionally, the trustees predict that the total cost for the program will exceed its total income in 2018 for the first time since 1982.
Business Insider pointed out that although the Social Security trust fund will be depleted, “payroll taxes are expected to cover about 75% of scheduled benefits. But if the gap isn’t filled, retirees could get less Social Security or workers might need to pay more into the system.”
Commentator John Stossel wrote in an op-ed for Fox News that the government — when it created the program in 1935 — assumed that there would be enough young workers to pay for the social security checks the government would send to the retired people.
“They assumed that (Federal Insurance Contributions Act tax) payments from young workers would cover the cost of sending checks to older people. After all, at the time, most Americans died before they reached 65,” Stossel said.
“Now, however, people keep living longer. There just aren’t enough young people to cover my Social Security checks.”
Treasury Secretary Steven Mnuchin said in June that the growing economy could help sustain both Social Security and Medicare.
“The administration’s economic agenda — tax cuts, regulatory reform and improved trade agreements — will generate the long-term growth benefits needed to help secure these programs,” he said.
Democrats want to expand the program by raising taxes, according to USA Today.
Sen. Elizabeth Warren pointed out that “Nearly every Democrat in the United States Senate has voted in favor of expanding Social Security,” according to Stossel.
Heritage Foundation budget analyst Romina Boccia proposed letting younger workers put money into their own retirement accounts rather than in Social Security.
“Imagine being able to own and control your own retirement dollars,” she said. “You could invest it in business, grow the economy, whatever rocks your boat.”
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