As President Joe Biden emphasizes the positives, new reports from the trustees of the Social Security and Medicare trust funds show that the programs are on their way to financial insolvency without action to reform them.
While the overall picture remains bleak, with Medicare due to become insolvent in six years and Social Security in 13, the numbers were slightly better than last year, as Biden pointed out.
"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," the president said in a statement. "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."
The strong economic recovery bought both programs additional time, however, each is still headed for insolvency, with Social Security estimated to hit zero in 2035, pushed back from last year's estimate of 2034, and Medicare's zero date pushed out to 2028, from 2026.
The COVID-19 pandemic is not expected to have an impact on the programs long-term, as increased mortality will be offset by anticipated healthcare cost increases in the future.
While touting the marginally improved numbers, Biden sharply criticized the GOP and a plan by Sen. Rick Scott, R-Fla., that would require all federal funding be voted on by Congress every five years.
"That's not the way to strengthen these programs," Biden said. "I will work with anyone willing to have an open and honest conversation about growing our economy, bringing down inflation, improving our fiscal position, and strengthening the programs that millions of Americans rely on."
According to the Washington Examiner, approximately 65 million people receive Social Security benefits and 64 million people are covered by Medicare.
A full 40% of older Americans rely exclusively on Social Security for retirement income, according to a 2020 report from the National Institute on Retirement Security, though that statistic has been disputed.
Andrew Biggs, resident scholar at the American Enterprise Institute, says the number of Americans relying solely on Social Security is really 12%, based on data from the Census Bureau.
According to the Examiner, Scott's plan has not gained much traction with congressional Republicans and Senate Minority Leader Mitch McConnell, R-Ky., has said that it won't figure into the GOP's agenda if Republicans take back the majority in November.
Analysis from the Committee for a Responsible Federal Budget shows that Social Security cannot guarantee full benefits to current retirees, who will see a 20% benefits cut on the expected insolvency date in 2035. Over the next 10 years, the program is expected to run a cash deficit of almost $2.5 trillion.
According to the committee, one way to fix Social Security is by raising taxes and cutting benefits on high-income earners, while another is to raise the age requirement for both partial and full benefits.
Marc Goldwein, the committee's senior policy director, told the Examiner that Biden's positivity may be premature, given the current state of the programs.
"It's sort of silly that the administration is taking credit for this improvement when all it means is that instead of a 62-year-old grandpa facing insolvency when he turns 74, it'll happen when he turns 75," he said. "That's better, but we haven't fundamentally solved anything."
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