The federal Old-Age and Survivors Insurance trust fund might not run out of cash until 2041, but the Federal Hospital Insurance Trust Fund could empty out by early 2019.
The trustees of the Social Security and Medicare programs have given those assessments in the 2008 program trust fund reports.
Social Security has about $4.3 trillion less funding in place than it appears to need over the next 75 years, the trustees estimate.
The government could remedy the gap by increasing the payroll tax rate to 15.6%, from 12.4% today, or by reducing benefits immediately by about 20%, the Social Security trustees conclude.
The Medicare hospital insurance trust fund, which backs the Medicare Part A program, already is facing serious financial problems, according to the trustees who oversee Medicare.
The hospital insurance fund probably will spend more cash than it takes in this year, the trustees warn.
Moreover, under the intermediate economic assumptions and other intermediate assumptions, “the HI trust fund is not adequately financed over the next 10 years,” the trustees write. “From the beginning of 2008 to the end of 2017, the assets of the HI trust fund are projected to decrease from $326 billion to $96 billion, which would be far less than the recommended minimum level of 1 year’s expenditures.”