Health Care

Social Security Must Reduce Benefits in 2034 if Reforms Aren’t Made

Social Security Must Reduce Benefits in 2034 if Reforms Aren’t Made”

While costs have exceeded net income since 2010, this is the first time in more than three decades that spending is expected to outweigh total income, by about $2 billion, meaning asset reserves will decline.

The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the US government to dip into the retirement system's trust fund to pay benefits to participants.

Medicare will run out of money sooner than expected, and Social Security's financial problems can't be ignored either, the government said Tuesday in a sobering checkup on programs vital to the middle class. Republicans say the programs must be revamped to ensure they will be solvent for baby boomers and their children.

The country's main welfare program for retirees, Social Security, also faces an uncertain future.

In addition to demonstrating that "there is sufficient revenue to pay for all benefits until 2034" even if Congress does nothing, Social Security Works president Nancy Altman said the Trustees' report clearly demonstrates that an ambitious expansion of Social Security benefits is also both affordable and desirable.

Both the cost-of-living increase and the Medicare outpatient premium are not officially determined until later in the year, and the initial projections can change.

Excluding federal debt payments, Medicare and Social Security together make up about 40 percent of total USA government spending.

In 2017, Medicare covered 58.4 million people, with 49.5 million older than 65.

They have called for increasing spending, which they would pay for with major tax increases, particularly on higher-income Americans.

President Trump campaigned on a promise that he wouldn't cut Social Security or Medicare, but he hasn't offered a rescue plan for either program.

Despite looming shortfalls, U.S. Treasury Secretary Steven Mnuchin said accelerated economic growth under the current administration would help to bolster both programs' coffers in the coming years. Advocates for the elderly said today there should be no cuts to Social Security benefits. At that point the program would only be able to pay out 91 percent of promised benefits.

Traditionally, most Democrats have not seen a need for immediate action.

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