The public trustees for Social Security and Medicare have been essential to the oversight of the programs’ finances since the positions were established in 1983. These Senate-confirmed, presidential appointees are tasked with ensuring that the trustees’ reports for Social Security and Medicare—the primary sources of information on the programs’ finances—are developed in an objective manner.
Unfortunately, for the past three years, the public trustee positions have gone unfilled. As the most recent holders of these positions, we have partnered with the Bipartisan Policy Center to provide independent analysis of the trustees’ reports while the positions remain vacant.
The following is a summary of our conclusions upon review of the 2018 Social Security and Medicare trustees’ reports, published by the ex officio trustees earlier this year.
Over the trustees’ long-range (75-year) valuation window, both Social Security’s and Medicare’s trust funds have a substantial gap between their scheduled benefits and the revenues collected to fund them. Closing the shortfall in the combined Social Security trust funds would require the equivalent of an immediate increase in its payroll tax rate from 12.40 percent to 15.18 percent or a 21 percent reduction in benefits for all future claimants. Closing the shortfall in the Medicare Hospital Insurance (HI) trust fund would require the equivalent of increasing its payroll tax rate from 2.90 percent to 3.72 percent or a 17 percent reduction in all scheduled benefits. The costs of closing these financial shortfalls will only grow over time.