The main Social Security trust fund, the Old-Age and Survivors Insurance fund, might not run out of cash until 2041, but the main Medicare fund, the Hospital Insurance fund, could empty out by early 2019.
The trustees of the Social Security and Medicare programs make those predictions in the 2008 Social Security and Medicare 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 for that program estimate.
The government could remedy the gap by immediately increasing the Social Security payroll tax rate to 15.6%, from 12.4% today, or by immediately reducing benefits by about 20%, the trustees estimate.
The Medicare Hospital Insurance trust fund, which backs the Medicare Part A hospitalization program, already is facing serious financial problems, according to the trustees who oversee Medicare.
The hospital trust 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.”