Trustees for Social Security and Medicare offered some good news Tuesday in their annual report on the programs’ financial health. But don’t get too excited: Their bad news more than made up for it.
On the up side, the retirement program didn’t have to dip into its reserves last year as expected, thanks to the soaring economy. The trustees now say Social Security costs won’t outpace revenue until 2020.
But then the program starts drawing on its $3 trillion in reserves — which means mandatory outlays in the regular federal budget. And after 2034, it will be unable to make full payments to retirees. Similarly, Medicare’s hospital-insurance nest egg will disappear as soon as 2026.
Worse, yet another year has gone by without DC plugging the structural holes that will sock these vital programs soon enough. Absent any changes, Social Security’s projected doomsday is now just 15 years off; Medicare’s, just seven.
When they go bust, payouts for retirees and health-care providers will shrink. And diverting general-fund tax dollars to cover the gaps will choke the federal budget, fuel deficits — or both.
As in the past, the trustees urge lawmakers to act sooner rather than later to limit the pain, preserve options, provide sufficient phase-in time and prepare the public.
What’s driving the problem’s no mystery: Americans now live longer than when the programs were started. Lower birth rates also mean there are fewer taxpaying workers for each retiree. Moreover, health-care costs have soared, in good measure thanks to new tests and treatments.
The trustees are right: Lawmakers shouldn’t kick the can until the last minute. There’s no excuse not to negotiate a curb at least on the growth of benefits. New hikes in the retirement age also now seem inevitable. And means-testing is something Democrats and Republicans can agree on.
What not to do is even clearer. Expanding benefits, for instance — as many Democrats, including several 2020 presidential wannabes, demand — would only tighten the squeeze.
Another non-starter: hiking taxes. That’ll just slow the economy (and maybe even lower Social Security and Medicare tax revenue). Plus, it’s unfair to ask young workers to bail out a system they don’t think will even exist when they retire.
Yet “doing no harm” won’t be good enough. Lawmakers need to put aside their partisanship and do what’s needed now — to avoid greater pain later.
https://www.google.com/amp/s/nypost.com/2019/04/27/social-securitys-short-path-to-implosion/amp/
On the up side, the retirement program didn’t have to dip into its reserves last year as expected, thanks to the soaring economy. The trustees now say Social Security costs won’t outpace revenue until 2020.
But then the program starts drawing on its $3 trillion in reserves — which means mandatory outlays in the regular federal budget. And after 2034, it will be unable to make full payments to retirees. Similarly, Medicare’s hospital-insurance nest egg will disappear as soon as 2026.
Worse, yet another year has gone by without DC plugging the structural holes that will sock these vital programs soon enough. Absent any changes, Social Security’s projected doomsday is now just 15 years off; Medicare’s, just seven.
When they go bust, payouts for retirees and health-care providers will shrink. And diverting general-fund tax dollars to cover the gaps will choke the federal budget, fuel deficits — or both.
As in the past, the trustees urge lawmakers to act sooner rather than later to limit the pain, preserve options, provide sufficient phase-in time and prepare the public.
What’s driving the problem’s no mystery: Americans now live longer than when the programs were started. Lower birth rates also mean there are fewer taxpaying workers for each retiree. Moreover, health-care costs have soared, in good measure thanks to new tests and treatments.
The trustees are right: Lawmakers shouldn’t kick the can until the last minute. There’s no excuse not to negotiate a curb at least on the growth of benefits. New hikes in the retirement age also now seem inevitable. And means-testing is something Democrats and Republicans can agree on.
What not to do is even clearer. Expanding benefits, for instance — as many Democrats, including several 2020 presidential wannabes, demand — would only tighten the squeeze.
Another non-starter: hiking taxes. That’ll just slow the economy (and maybe even lower Social Security and Medicare tax revenue). Plus, it’s unfair to ask young workers to bail out a system they don’t think will even exist when they retire.
Yet “doing no harm” won’t be good enough. Lawmakers need to put aside their partisanship and do what’s needed now — to avoid greater pain later.
https://www.google.com/amp/s/nypost.com/2019/04/27/social-securitys-short-path-to-implosion/amp/
