Social Security will not be able to pay full benefits in 2035 if Congress

CNN
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Social Security and Medicare will not be able to fully pay benefits in just over a decade if lawmakers don’t act to address the pending shortfalls, according to reports released Monday by the entitlement programs’ trustees. While the trust funds’ finances improved slightly, they remain in dire shape.

The combined Social Security trust funds – which help support monthly payments to the elderly, survivors and people with disabilities – are expected to be exhausted in 2035, one year later than previously forecast, according to its trustees’ annual report. After that, payroll tax revenue and other income sources will only be able to cover 83% of benefits owed.

Meanwhile, Medicare’s financial condition improved more. It is expected to be able to cover scheduled inpatient hospital benefits until 2036, five years later than last year’s projection, according to its trustees.

The reports are likely to become a talking point in this year’s presidential campaign. Both President Joe Biden and his presumptive Republican rival, former President Donald Trump, have promised to protect Social Security and Medicare, both beloved but endangered entitlement programs.

However, even with this reminder from the trustees, Congress is unlikely to delve into the controversial issue anytime soon, even as the ballooning programs are putting added strain on the federal budget and contributing to rising deficits.

But the longer lawmakers wait, the fewer options they’ll have, experts warn.

Looking solely at the trust fund that covers retirement and survivor benefits, Social Security will only be able to afford scheduled payments in full until 2033, roughly the same projection as last year. At that time, the fund’s reserves will be depleted, and continuing income will only cover 79% of benefits owed.

The Disability Insurance Trust Fund is expected to be able to cover full benefits at least through 2098, when the projection period ends. Merging the two trust funds would require an act of Congress, but the combined projection is often used to show the overall status of the entitlement.

About 67 million Americans received Social Security benefits in 2023.

As for Medicare, its hospital insurance trust fund, known as Medicare Part A, has a few more years before it runs dry. But in 2036, Medicare will only be able to pay 89% of total scheduled Part A benefits, which also cover hospice care, short-term skilled nursing facility services and home health services following hospitalizations.

Medicare covered 66.7 million senior citizens and people with disabilities in 2023.

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