According to an annual report released Monday, the program serving 44 million Americans will drain its trust fund by 2035 — three years earlier than previous estimates — and if Congress doesn’t step in, the program will have to begin cutting benefits.
Among other key dates in the report:
- Social Security’s disability program will exhaust its trust fund in 2016.
- Medicare will dry up in 2024.
Retiring baby boomers, the limping U.S. economy and a lack of action from politicians were cited as the main contributors to the dismal situation.
“Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible,” the trustees said in the report. “Taking action sooner rather than later will leave more options available to phase in changes so that the public has adequate time to prepare.”
The trustees also applied more conservative measurements to deduce projections in the 2012 report. They predict that the trend of workers’ wages being countered by high energy costs will continue, according to The Christian Science Monitor. Another expectation is that people will work fewer hours than previously reported. If those two predictions prove true, the results would mean lower payroll tax contribution for both Social Security and Medicare.
In a nationally televised Tuesday press conference, Treasury Secretary Timothy Geithner, one of the programs’ six trustees, stressed the seriousness of the report while conveying that Social Security and Medicare are not necessarily lost causes.
“Millions of Americans rely on Social Security and Medicare for income and for health care, and millions more will do so in the future,” Geithner said. “These programs have the resources they need to fulfill their commitments to the American people for years to come. But what these reports also reinforce is that we must take steps to keep these programs whole for the future.”
The problems pummeling Social Security and Medicare no doubt will be an issue in the 2012 race for the presidency. Presumed Republican presidential nominee Mitt Romney already has proposed raising the Social Security retirement age as one possible solution, and he has endorsed the House Republicans’ plan regarding Medicare reform.
The opinions contained in this column are solely those of the writer.
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