As we speak, the Trustees of the Social Safety and Medicare belief funds launched their 2020 report on the monetary standing of each applications (report, abstract). The numbers don’t look good. I say this noting additionally that the projections do not take into consideration any impacts on mortality, well being care prices and taxes income from COVID-19. Thus, one might contemplate these Trustees report projections optimistic. Regardless, right here is the place we stand:

Social safety belief fund will run out of funds in 15 years. The Outdated-Age and Survivors Insurance coverage (OASI) Belief Fund will pay scheduled advantages on a well timed foundation till 2034. Beginning in 2035, incoming tax income will solely have the ability to pay for 76% of scheduled advantages.

Social Safety funds are getting worse. With the newborn boomers retiring, Social Safety’s monetary state of affairs is projected to worsen. Within the subsequent decade, deficits will likely be $2 trillion, equal of 0.7% % of Gross Home Product (GDP). Deficits will exceed 1.2% % of GDP by 2040 and 1.5% % of GDP by 2094.

Medicare Belief Fund will likely be exhausted in 7 years. Medicare’s Hospital Insurance coverage (HI) Belief Fund, which pays Medicare Half A inpatient hospital bills will have the ability to pay scheduled advantages till 2026, the identical as reported final yr. Beginning in 2027 (in simply 7 years!) persevering with program revenue will likely be ample to pay solely 90% of scheduled advantages. Half B advantages, nevertheless, are absolutely financed as Medicare requires that beneficiary premiums annually are set to satisfy the subsequent yr’s anticipated Half B prices.

Social safety and Medicare make up greater than 2 out of each 5 {dollars} of federal spending. These two applications alone accounted for 41% of federal expenditures in FY 2019.

Because the Committee for Accountable Federal Finances acknowledged, “Time is working out to save lots of Social Safety.”

https://www.ssa.gov/OACT/TR/2020/tr2020.pdf

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