Social Security may run dry earlier than previously anticipated, trustees say

Yahoo

5 hours ago

The trust funds for Social Security and Medicaid will run out of money in as little as 8 years, a shorter time frame than previously estimated, according to a report issued Wednesday by the programs' trustees.
The Social Security fund will run dry in 2033, unless Congress combines the program's old-age and disability funds, in which case insolvency would arrive in 2034, the report found. A finding last year predicted Social Security would become insolvent in 2035 or 2036.
Medicare's hospital insurance fund is expected to run out of money in 2033, the report said.
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'Social Security and Medicare are vital programs that support tens of millions of Americans across the country,' U.S. Secretary of Treasury Scott Bessent said in a statement. 'This data underscores the need for lawmakers to take action to support the long-term viability of these programs.'
If Congress fails to address the projected budget shortfalls, automatic cuts will dial back Social Security benefits by 23% and Medicare hospital benefits by 11% in 2033, the report found.
Roughly 66 million Americans receive medical coverage through Medicare, while 70 million people are set to receive Social Security benefits this year.
The Social Security and Medicare trust funds generate revenue through a payroll tax paid by employees and employers, setting the income apart from the overall federal budget. The programs routinely spend more money than they take in through such taxes.
President Donald Trump has vowed to safeguard Social Security and Medicare, even as the White House pursues spending cuts at other federal programs and agencies.
The Department of Government Agency, formerly led by Elon Musk, sought to eliminate what it described as 'waste, fraud and abuse' in Social Security and Medicare. In March, the White House backed such efforts in a memo.
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Last year, the Government Accountability Office, a federal agency, estimated that taxpayers lose as much as $521 billion annually to fraud, much of which occurs in entitlement programs like Medicare.
The Centers for Medicare and Medicaid Services (CMS) have stopped more than $100 billion in potentially fraudulent expenditures over recent months, the agency said in a statement. Still, those possible savings make up a fraction of roughly $1.9 trillion in spending for Medicare and Medicaid in 2023, the most recent year for which data is available.
'Medicare provides essential coverage for millions of American seniors, but this year's report underscores the urgent need for serious, sustained reform to secure its long-term future,' CMS Administrator Mehmet Oz said in a statement.