Every year, the Social Security Administration issues a report on the current and projected financial status of the two biggest social programs in the country, Social Security and Medicare. This year’s report was just released, and things are not looking good.
“Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing,” a summary of the report begins. Translation: despite the chunk of your paycheck that goes missing every couple of weeks, the programs are running out of money.
It goes on: “The Trustees recommend that lawmakers take action sooner rather than later to address these shortfalls…Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.”
The summary references the “broad continuum of policy options that would close or reduce the long-term financing shortfall” of Social Security and Medicare. Lawmakers could raise the payroll tax or the retirement age. They could adjust the formula that determines how people receive their benefits. They could pass some combination of these and other measures. They could do a lot of different things.
But as people who’ve been paying attention to American politics for the last decade, we aren’t holding our breath that change will come any time soon, even to programs this vital to hundreds of millions of Americans. Such reform can only happen if the leadership of both houses and the president can come together to reform a complicated program that comprises 45 percent of Federal program expenditures.
Case in point: President Trump, despite repeated previous promises to leave Social Security alone, proposed $26 billion in cuts from the program in his budget, a change Democrats promised to block.
If nothing is done about the situation, benefits are on track to be reduced by around 2035, which is actually a slight improvement on the 2034 prediction in last year’s report. But that tiny bit of good news is overwhelmed by a sense of dread that, by the time today’s workers make it to retirement, they won’t get much from the programs they will have been funding for their entire working lives.
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