The trustees of the combined Old-Age and Survivors Insurance and Disability Insurance trust funds reported to Congress today that they project the funds will be depleted by 2034 (the same as projected last year), with the disability fund depleted by 2023, six years later than last year’s projection. “Social Security’s total income is projected to exceed its total cost through 2019, as it has since 1982,” the report said.
In addition, the trustees’ current estimate for a Social Security cost-of-living-adjustment will be 0.2% for 2017, followed by a 2.9% increase in 2018 and a 2.6% increase in 2019.
The Trustees project that the Medicare Hospital Insurance (HI) Trust Fund will be depleted in 2028, two years earlier than projected in last year’s report.
The report credits the six-year gain in solvency for the disability fund to the 2015 Bipartisan Budget Act, while Treasury Secretary Jacob Lew said in a statement that the report “continues to reflect the positive impact of the Affordable Care Act on our nation’s health care system. Since the law was passed, increases to health care costs have slowed substantially.”
The report says that after 2019, “interest income and redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual deficits until 2034, when the reserves will be depleted.” At that time, “tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2090.”
Republicans were less sanguine about the reports, with House Ways and Means Committee Chairman Kevin Brady (R-Texas) releasing a statement saying that “If the Obama administration continues its irresponsible inaction, Medicare and Social Security will fail to serve our children and grandchildren in the future.”
Commenting on the report today, AARP CEO Jo Ann Jenkins renewed the older Americans lobbying group’s call for the presidential candidates “to commit to action on Social Security’s future, and also ask the same of those running for Congress and the Senate.” A statement from the trustees (there are only four; the two ‘public’ trustees spots are open) argued that “Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing,” and urged lawmakers to “take action sooner rather than later to address these shortfalls, so that a broader range of solutions can be considered.”
Some of those lawmakers grilled Social Security’s Chief Actuary Stephen Goss at a hearing today of the Social Security Subcommittee of the House Ways and Means Committee in Washington. Chairman Sam Johnson (R-Texas) released a statement before the hearings in which he said “Today’s report is another reminder of the real challenges Social Security faces and its grim future looming ahead if we don’t act. The American people deserve a program they can count on, not campaign promises on plans that don’t add up.” At the hearing, he criticized Goss for the 82-day delay in submitting the annual report, which Goss blamed on the challenges of getting the four trustees into the same room to make decisions, and on the lack of public trustees.
Then he asked Goss “if every dollar of earnings was subject to Social Security taxes, would that make Social Security solvent?” Goss’ answer: “Not by itself.”
Goss said to the panel, “Should we reach the point of reserve depletion, we would not be able to pay benefits in full and on time; we have confidence you all will not allow that to happen.”
The ranking Democratic member on the subcommittee, Rep. Xavier Becerra of California, noted that Social Security “is the only program in the federal government that pays for itself; it has an 80-year track record of paying benefits on time and in full,” and then scolded Chairman Johnson: “Mr. Chairman, we know Social Security will face challenges in the future, but let’s not fabricate crises.”
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