Social Security and Medicare will be able to pay benefits for slightly longer than projected a year ago, their trustees reported Monday, but the programs will still run short of money in a decade or so. As it stands, the trusts that pay for Social Security benefits will be drained in 2035, a year later than the most recent forecast, CNN reports. Other revenue would be sufficient at that point to cover 83% of the benefits owed. Medicare got a five-year reprieve, until 2036, the trustees' report said.
The improvement is attributable to economic conditions improving more than projections expected, per the New York Times; workers were added to the labor market, which increased the programs' revenue. Although encouraging, the report doesn't change the long-term reality. Commissioner Martin O'Malley said that as long as people keep working, Social Security will be able to make its payments. But he said, "Congress still needs to act in order to avoid what is now forecast to be, in absence of their action, a 17% cut to people's Social Security benefits."
Waiting to address the problem will only mean fewer options remain, experts said. If the programs grow close to insolvency, Congress might feel forced to borrow more to pay the benefits. That could make the national debt skyrocket to an amount that could never be paid off, as well as drive interest rates much higher, per the Washington Post. "This isn't a report where everything is fine and wonderful. It almost shows you how much we're living on a razor's edge," said Republican Rep. David Schweikert, vice chair of the Joint Economic Committee. About 70 million people collect Social Security benefits, and more than 66 million participate in Medicare. (More Social Security stories.)
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