The Medicare and Social Security trustees sent a blunt message in their latest annual reports: The programs’ long-term costs “are not sustainable with currently scheduled financing and will require legislative action to avoid disruptive consequences for beneficiaries and taxpayers.”
In a new blog post, Concord Coalition Executive Director Robert L. Bixby notes that many non-partisan sources have warned about the pressures on both programs from an aging population and rising health care costs.
What is surprising, he says, “is that so few lawmakers seem to take these warnings seriously.”
Focusing on trust fund balances may give the impression that Social Security and Medicare are on sound footing for many years. But this ignores the growing strain they put on the federal budget because they pay out more than they take in from dedicated resources, including payroll taxes and Medicare premiums.
Social Security and Medicare will require a general revenue infusion of $364 billion in 2015 (2 percent of GDP). The trustees say that will double to 4.2 percent of GDP by 2040.
As summed up by the trustees: “Each of these trust funds’ operations will contribute increasing amounts to federal unified budget deficits in future years.”
“It’s time,” Bixby says, “for lawmakers and those who seek federal office in 2016 to recognize that the current unsustainable path of Social Security and Medicare poses both a major budgetary challenge and a threat to the retirement security of millions of Americans.”
External links:
Concord Coalition Says Trustees’ Reports Show Mounting Pressure on Federal Budget
Social Security Trustees Report
Medicare Trustees Report
A Cut to Social Security Disability Benefits May Be Around the Corner (Washington Post)
Medicare and Social Security Worse Than They Look: Trustees (Fiscal Times)
