Social Security’s costs to exceed income this year
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 U.S. government to dip into the retirement system’s trust fund to pay benefits to participants. The program’s trustees said the shortfall trend could worsen in the decades to come.
Indeed, the trustees of Social Security and Medicare forecast the program’s reserves will be depleted by 2034, at which point it won’t be able to pay full benefits on a timely basis. The report said that if the funds are depleted, the program could pay about three-quarters of benefits.
Because Social Security is a main source of income for older Americans, that scenario could crimp household budgets for seniors and even push some into poverty. About 23 percent of older married couples rely on Social Security as their main source of income, according to the program.
“Lawmakers have a broad continuum of policy options that would close or reduce Social Security’s long-term financing shortfall,” the report noted. Options include raising the maximum income cutoff for imposing Social Security taxes, currently $127,200.
This year, the program’s cost will outstrip total income by $2 billion and non-interest income by $85 billion, the report said.
The report also forecasts that Medicare’s giant trust fund for inpatient care won’t be able to cover projected medical bills starting in 2026, three years earlier than previously expected.
President Donald Trump says he won’t cut Social Security or Medicare, but hasn’t offered a rescue plan for the long run.
Democrats want to expand the safety net by spending more on health care and education.
–With reporting by the Associated Press.
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