Concerns Continue About the Solvency of Medicare and Social Security

A recent article in The Wall Street Journal highlighted continuing concerns about the solvency of Medicare and Social Security, the two largest benefit programs.  While the long-term solvency of the programs has improved slightly, an annual report card provided by both programs’ trustees detailed that exhaustion of reserves as early as next year would trigger cuts in benefit payments.  Treasury Secretary Jacob Lew has recommended that Congress address the shortfall by reallocating the share of payroll taxes that fund the disability-insurance trust fund and the retirement-benefit reserves, which is much larger.  The report card predicts that Social Security will run at a deficit by 2022 and exhaust its reserves by 2035.  As for Medicare, the report card predicts full benefits for elderly and disabled patients through 2030 with projections of solvency consistently improving.  Charles Blahous, a Republican trustee for the programs, noted that nothing in the reports were “real big surprises” and that crisis facing the programs illustrates the dangers in waiting to act to resolve the solvency issues.