Social Security and Medicare Trust Funds Face Financial Challenges, Urging Lawmakers to Take Action

The trustees of the Social Security and Medicare trust funds released their annual reports on Friday, revealing that the trust funds are facing financial challenges. According to the report, the combined Social Security trust funds, which help support payouts for the elderly, survivors and disabled, are projected to run dry in 2034.

Treasury Secretary Janet Yellen commented on the reports, saying, “Social Security and Medicare are two bedrock programs that older Americans rely upon for their retirement security.” She added that the Biden-Harris Administration is “committed to ensuring the long-term viability of these critical programs so that retirees can receive the hard-earned benefits they’re owed.”

The Old Age and Survivors Insurance Trust Fund, one of the funds that pay Social Security benefits, is projected to run out of reserves in 2034. At that time, the program’s continuing income will only cover 80% of benefits owed. The hospital insurance trust fund, known as Medicare Part A, will only be able to pay scheduled benefits until 2026.

The trustees of the trust funds have urged lawmakers to take action to address the pending shortfall. Without legislative action, Social Security checks will get a lot smaller in 2034. The trustees have also recommended that lawmakers consider increasing the payroll tax rate, raising the taxable maximum, and adjusting the cost-of-living adjustment formula.

The Social Security and Medicare trust funds are essential programs for older Americans, and the trustees have made it clear that legislative action is needed to ensure their long-term viability. The Biden-Harris Administration has expressed its commitment to protecting these programs, and it is now up to lawmakers to take the necessary steps to ensure that retirees can receive the benefits they are owed.