WASHINGTON—Social Security and Medicare, the two largest portions of the federal safety net, continued to deteriorate in the last year, with the programs' trustees projecting the combined Social Security retirement and disability programs will exhaust their trust fund three years sooner than previously thought.
The trustees for the two programs said in their annual report that the long-run deficit projections for both Social Security and Medicare worsened over the last year, putting the onus on U.S. policy makers to address the problems sooner rather than later to avoid hurting seniors, low-income households and others who depend on the program.
"Lawmakers should be aware that it will become increasingly difficult to avoid adverse effects on current beneficiaries, those close to retirement and low-income beneficiaries...if legislative changes are delayed much further," the two public trustees, Charles Blahous III and Robert Reischauer, said in a message included with the reports.
Unlike last year, when the trustees projected Medicare would exhaust its principal trust fund well ahead of previous expectations, this year's report raised more concerns about Social Security. The combined program, which includes funds covering retirees and another helping people with disabilities, is now expected to exhaust its trust fund in 2033, three years faster than was forecast last year. The trustees said the single-year deterioration in the combined Social Security program's long-term deficit was the largest since 1994.
Of particular concern is Social Security's program covering disability insurance. The trustees said the disability fund fails both short- and long-term tests of fiscal health, and that they now project the fund will exhaust its trust fund in 2016, two years earlier than last year.
"The [disability insurance] program faces the most immediate financing shortfall of any of the separate trust funds; thus lawmakers need to act soon to avoid reduced payments to DI beneficiaries four years from now," the trustees said in a summary of their report.
The fiscal health of the two funds is a key political issue in Washington, with costs expected to continue to grow as an increasing number of baby boomers reach retirement age in the coming years, and with health-care costs climbing at a faster rate than wages and the economy. Medicare is generally available for Americans 65 and older, and people can begin collecting Social Security benefits when they turn 62. |
