by Mitch Kokai
Senior Political Analyst, John Locke Foundation
A new report from the trustees of the Social Security and Medicare trust funds underscores that the programs are on the path to fiscal insolvency, but proposals to reform them remain the “third rail” of American politics as the White House emphasizes the positive.
While still dire overall, with Medicare expected to become insolvent in six years and Social Security in 13, the numbers were slightly improved from a year ago, a point underscored in a statement from President Joe Biden.
“The Social Security and Medicare Hospital Insurance Trust Funds will be able to pay benefits on a timely basis for longer than previously projected before the American Rescue Plan passed,” said Biden. “The trustees’ report says that those improvements are a result in part of a faster recovery in employment, earnings, and economic growth than previously projected.”
Though the strong economic recovery pushed back the go-broke dates for both programs, each is still very much on that path. Social Security’s trust fund is estimated to zero out in 2035, back from last year’s estimate of 2034, while Medicare’s trust fund for hospital care moved from 2026 to 2028.
The trustee’s report said the long-term impact of COVID-19 on the programs was expected to be a wash, with increased mortality offset by expected rises in other healthcare costs in future years.
While praising the slightly improved financials, Biden also lashed out at Republicans, in particular a plan released by Sen. Rick Scott (R-FL) that would have all federal funding come up for a vote in Congress every five years. …
… But experts and most politicians agree something will be done in order to protect the financial integrity of both programs.
In that sense, the report could be seen as a negative if it gives the impression that Social Security’s financial woes are not so bad.