“Today, the ex officio trustees of the Social Security and Medicare trust funds released the 2017 annual reports on the financial conditions of the two programs. In the continued absence of public trustees, this letter provides the kinds of information and assurances that the public trustee message, which traditionally accompanies the reports, might otherwise have included.
The trustees’ projections remain ominous for the financial future of the programs, with serious implications for millions of current and future program beneficiaries as well as taxpaying workers.
“The trustees’ projections remain ominous for the financial future of the programs, with serious implications for millions of current and future program beneficiaries as well as taxpaying workers. This is particularly concerning as long as there are continued delays in legislative action to shore up the programs’ financial outlooks. The reports show large projected funding shortfalls for both the Social Security and Medicare trust funds, which would require significant changes to close, even if addressed today. For Social Security alone, an immediate increase in payroll taxes from 12.40 percent to 15.16 percent, or a cut in benefits for all future beneficiaries of 20 percent would be required, for example. The corresponding payroll tax increase required for Medicare Hospital Insurance (HI) would be from 2.90 percent to 3.54 percent, or future insurance payments would need to be cut by 14 percent. Because of its unique financing structure, growing costs of the Medicare Supplementary Medical Insurance program also put pressure on the federal budget and premium paying beneficiaries. The longer legislative action to address these financing challenges is delayed, the harsher policy changes will need to be.”
ABOUT THE AUTHORS
Charles P. Blahous III and Robert D. Reischauer, the most recent public trustees of the Social Security and Medicare trust funds have reprised their roles through a new platform at the Bipartisan Policy Center by continuing to provide independent appraisals of the programs’ finances.
This project is made possible in part by a grant from the Peter G. Peterson Foundation.