Government report says Medicare, Social Security headed for insolvency

The Social Security Administration’s main campus is seen in Woodlawn Md. Medicare’s financial problems have gotten worse and Social Security’s can’t be ignored forever

The Social Security Administration’s main campus is seen in Woodlawn Md. Medicare’s financial problems have gotten worse and Social Security’s can’t be ignored forever

The main trust fund behind Medicare, the US health-care program for the elderly and disabled, will be exhausted in 2026, three years earlier than was projected a year ago, the government said Tuesday.

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.

"Each year, the release of the trustees report provides an occasion for Social Security scaremongering by those wanting to shrink our social insurance system", Monique Morrissey, an economist with the Economic Policy Institute, noted in a blog post on Tuesday.

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

The government says Medicare's financial problems are getting worse and Social Security's can't be ignored.

They have called for increasing spending, which they would pay for with major tax increases, particularly on higher-income Americans.

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Unless lawmakers act, both programs face the prospect of being unable to cover the full cost of promised benefits. For Medicare, it could mean that hospitals, nursing homes and other providers of medical care would be paid only part of their agreed-upon fees.

Medical costs have long outpaced economic growth, and despite some slowdowns in cost over the past few years, that has not changed.

The trustees estimate that by 2034 the combined trust funds for Social Security - which help fund the old age and disability programs - will run dry.

Democrats want to expand the safety net by spending more on health care and education. Legislative changes also contributed to the expected shortfall, according to a report from the program's trustees.

Higher deficits would leave less maneuvering room for policymakers when the day of reckoning finally arrives for Social Security and Medicare. Advocates for the elderly said today there should be no cuts to Social Security benefits. That money is invested in special government securities, which also collect interest.

Despite the word "depletion", the trust fund will still be able to pay beneficiaries about three-quarters of their scheduled benefits after 2034.

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