The recently released 2024 Social Security and Medicare Trustees report shows an improved outlook for these programs. This year's projections show that Social Security can pay its benefits and cover administrative costs now until 2035, one year longer than projected in last year's report. But, after that, it can only cover 83 percent of benefits, even if Congress fails to take no action to fix the program to ensure its financial viability.
Medicare's fiscal health improves even more, says the Medicare Trustees Report. It projects that the program's Part A (Hospital) fund will be able to pay 100% of scheduled benefits until 2036 -- a full five years later than estimated by the trustees last year.
Under the Social Security Act of 1935, the Board of Trustees is required to submit the annual reports on the current and projected financial status of the trust funds to Congress on April 1 each year.
It's Time for Congress to Protect Social Security
"This year's report is a measure of good news," says Martin O'Malley, Commissioner of Social Security, in a statement recognizing the impact of "strong economic that have yielded impressive wage growth, historic job creation and a steady, low unemployment rate.
"So long as Americans across our country continue to work, Social Security can -- and will -- continue to pay benefits," says O'Malley, calling on Congress to take action to ensure the financial viability of the Trust Fund "into the foreseeable future just as it did I the past on a bipartisan basis."
"I will continue to urge Congress to protect and support Social Security and restore the growth of the funds. Whether Congress chooses to eliminate the shortfall by increasing revenue, reducing benefits, or some combination, is a matter of political preference, not affordability," observes O'Malley, noting that there are several legislative proposals that address the shortfall without benefit cuts -- it should debate and vote on these and any other proposals.
Social Security Advocacy Groups. Key GOP Lawmaker Issue Statements
With the May 6 release of the 2024 Social Security and Medicare Trustees report, statements were generated by Social Security advocacy groups and congressional lawmakers to give their take on the projections.
Even with the report pushing back the expected depletion dates for Social Security and Medicare, Max Richtman, President & CEO, National Committee to Preserve Social Security & Medicare (NCPSSM), called for Congress to immediately act to strengthen the Social Security program for the 67 million beneficiaries. "We cannot afford to wait to take action until the trust fund is mere months from insolvency, as Congress did in 1983. The sooner Congress acts, the less painful the remedies will be, says Richtman.
In responding to comments that Social Security is going 'bankrupt, Richtman says: "Revenue always will flow into Social Security from workers' payroll contributions, so the program will never be 'broke'. But no one wants seniors to suffer an automatic 17% benefit cut in 2035, so Congress must act deliberately, but not recklessly. A bad deal driven by cuts to earned benefits could be worse than no deal at all."
Richtman warns that seniors will take a devastating financial hit if Congress is forced to make cuts in 2035. "Average Social Security benefits are already very modest -- about $23,000 per year, which is only $3,000 higher than the federal poverty line for a household of two," he says, noting that wealthier beneficiaries can afford to contribute more to the program without hurting them financially.
"Social Security has an accumulated surplus of $2.79 trillion. It is 90 percent funded for the next quarter century, 83 percent for the next half century, and 81 percent for the next three quarters of a century. At the end of the century, in 2100," says Nancy Altman, President of Social Security Works, noting that the program is projected to cost just 6.1 percent of gross domestic product ("GDP").
Like the SSA Commissioner and NCPSSM's Richtman, and Altman urges Congress to act sooner rather than later to ensure that Social Security can pay full benefits for generations to come, along with expanding Social Security's modest benefits. "That will restore one of the most important benefits Social Security is intended to provide to the American people -- a sense of security," she says.
As to Medicare, the released report notes the life expectancy for Medicare part A Trust Fund is extended another five years.
"It's great news that the Part A trust fund has an additional FIVE years before it becomes depleted, partly because of the unexpected strength of the U.S. economy. But current and future seniors expect action to keep the trust fund solvent for the long term," said Richtman.
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