The public trustees for Social Security and Medicare have been essential to the oversight of program finances since the official positions were established in 1983. These individuals 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 two 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.
Our review of the trustees’ 2017 annual reports on the financial conditions of Social Security and Medicare has led to the following conclusions:
Both Social Security and Medicare face substantial and certain financing problems that will continue to worsen until corrective legislation is enacted. Social Security’s combined trust funds currently face a long-range (75-year) financing shortfall equal to 17 percent of projected program costs, while the Medicare Hospital Insurance (HI) program faces a long-range shortfall equal to 14 percent of its projected costs. As these respective trust funds near depletion, their deficits will become larger and more difficult to correct. This is especially true for Social Security, for which 23 percent of benefits would lack financing at the point of combined trust fund depletion in 2034, gradually increasing to 27 percent 75 years from now. Because Medicare’s Supplementary Medical Insurance (SMI) trust fund is financed largely from general government funds rather than a separate payroll tax in the manner of the other trust funds, its growing costs will place mounting pressure on the federal budget over the coming decades. Lawmakers’ current posture of inaction with respect to Social Security and Medicare finances is clearly untenable.