US Social Security, Medicare finances worsening

US Social Security, Medicare finances worsening

US Social Security, Medicare finances worsening

This is the first time that's happened since the Reagan admin. Entitlement programs create an entitled public.

The Medicare trust fund will be depleted in 2026, the administration said.

This would leave the fund depleted by 2034, matching last year's forecast. The program provides health insurance to some 60 million people, most of whom are over 65 years old.

Unless lawmakers act, both programs face the prospect of being unable to cover the full cost of promised benefits.

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.

Sixty-two million people, including 45 million retired workers, were receiving OASDI benefits at the end of 2017. The average monthly payment is $1,294 for all beneficiaries.




That's because, according to the report, the government will collect less in income taxes, meaning less money will flow into the Medicare trust fund. Medicare spent $710 billion in 2017, according to the report, making it the single biggest purchaser of health services in the U.S. The trustees include Treasury Secretary Steven Mnuchin and Health and Human Services Secretary Alex Azar. Democrats insist that the programs would remain solvent as long as the rich pay their "fair share", while Republicans claim that they simply need to eliminate "waste, fraud, and abuse" in the federal budget.

Trump administration officials instead are counting on a strong economy to improve the solvency of Social Security and Medicare.

The report says the other trust fund, which covers Medicare Parts B and D, is expected to be financed through the next 10 years and beyond.

That fund pays hospital bills of medicare recipients. Income to the Medicare fund is expected to be lower than estimated past year because of "lower payroll taxes attributable to lowered wages in 2017 and lower levels of projected gross domestic product", the Treasury said in a "fact sheet" accompanying the report.

They attributed the circumstances to last year's lower-than-expected wages, revenue-cutting legislation, heightened spending and an aging US population. That's in part due to lower payroll taxes because of lower wages and lower Social Security benefit taxes, the trustees said.

Mnuchin said in a statement that there's time to fix the problems.

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