Social Security and Medicare Trustees Friday issued their annual report on the financial future of the two entitlement programs. The prognosis isn’t good, and, in fact, is even worse than was reported just one year ago.
According to the report, Social Security is now permanently cash negative and can no longer be funded solely from the payroll tax. It is projected to exhaust funds in 2036 — one year earlier than the report predicted last year.
Medicare isn’t faring any better. The trustees expect the fund to run out of money in 2024, and not 2029 as was previously expected. For the sixth year in a row, the trustees also, made an “excess general revenue Medicare funding” determination.
It only requires two consecutive determinations before the president is required to submit a legislative proposal to deal with the funding crisis within 15 day of his next budget.
“Today’s news that Social Security and Medicare will become insolvent even sooner than expected is a sobering wake up call and makes clear we must take action now to avoid catastrophe,” said Sen. Jeff Sessions, Ranking Member of the Budget Committee in a statement. “Washington has no excuse. We have known for years this was coming.”
Social Security and Medicare have been front-and-center in recent months as lawmakers battle over the budget and which areas to cut spending. Those discussions were put into overdrive this week as debate about raising the debt ceiling heated up and lawmakers met at the White House for budget talks.
In a speech in New York Monday night, Speaker of the House John Boehner said that a vote to raise the debt ceiling would require “trillions” of dollars worth in spending cuts, suggesting that entitlement programs would be on the table.
Senate Minority Leader Mitch McConnell came out Thursday night saying that he would not vote to raise the debt limit without significant cuts and revisions to programs like Medicare.
McConnell did say, however, that changes to Social Security are likely to be off the table when it comes to the debt ceiling, despite its dire finances.
“I would love for Social Security to be a part of it,” he said. “The president can speak for himself, but I think he’s not interested in doing Social Security without raising taxes. We don’t think that’s necessary.”
In his statement, Sessions continued to hound the Democrats for budget proposal. “It has been 744 days since the Democrat-led Senate has passed a budget,” he said. “If the Senate goes another year without passing a budget it would be a national scandal.”