Latest news with #SocialSecurityFairnessAct
Hindustan Times
11 hours ago
- Business
- Hindustan Times
Monthly social security checks could be cut by this year if Congress doesn't act
The Social Security Administration's (SSA) trust fund is slated to run out a year earlier than previous predictions as per 2025's Trustee Report Summary released on Wednesday (June 18). This could put about 70 million current beneficiaries of the system at risk as the demographic in the US starts shifting from a younger tax-paying population to an older benefit-ridden one. Although numbers can alter from year to year based on fluctuations in the economy and regulations in the number of beneficiaries, one thing is clear: the SSA's funds will deplete sooner rather than later and leave millions in the lurch. The root of the issue lies in the fact that the number of dependents is rapidly increasing and is projected to overshadow those contributing to the system. As the program's data suggests, the number of people claiming benefits jumped 17% to 1.8 million in May 2025 and is already on the fast track to enlisting 4 million additional beneficiaries this year. In addition, the recent implementation of the Social Security Fairness Act has substantially increased the pool size and quantum of benefits per individual. Dependents of and those receiving public pensions are now eligible to receive full benefits from the program. This puts additional constraints on an already overburdened system. The report implies that funds are now expected to run out by 2034, a year earlier than what was predicted earlier. 'If the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund projections were combined, the resulting projected fund (designated OASDI) would be able to pay 100 percent of total scheduled benefits until 2034, one year earlier than reported last year. At that time, the projected fund's reserves would become depleted, and continuing total fund income would be sufficient to pay 81 percent of scheduled benefits,' the report claims. The only viable solution to this situation is to either reduce the benefits/beneficiaries or increase the amount of revenue generated. Poll after poll declares that the public is increasingly in favor of the latter option over the former, since they oppose the principle of depriving those in need of crucial funds. 'To ensure we serve the public and deliver high-quality service to the 185 million people who work and pay payroll taxes for Social Security and the 70 million beneficiaries who will receive benefits during 2025, the financial status of the trust funds remains a top priority for the Trump Administration,' said Commissioner of Social Security Frank Bisignano in a statement published by the US Department of the Treasury. One popular approach suggested by multiple advocacy groups is to raise the cap for taxable income from the current threshold of $176,100. This 'tax the rich' has garnered favor among those who believe the wealthy should be responsible for bankrolling the SSA's depleting funds. The idea of raising the full retirement age to 70 years instead of the current 67 has failed to gain much support amid fears that the same may deprive an older population of much-needed support. Amid recent job cuts and multiple other changes at the SSA, stability of income after retirement has become all the more crucial. As Bisignano said, 'Congress, along with the Social Security Administration and others committed to eliminating waste, fraud, and abuse, must work together to protect and strengthen the trust funds for the millions of Americans who rely on it – now and in the future – for a secure retirement or in the event of a disability.'
Economic Times
2 days ago
- Health
- Economic Times
US healthcare almost broke, Medicare and Social Security's trust funds will have no money by this date
ETHealthWorld The Medicare hospital insurance trust fund is expected to deplete in 2033, three years earlier than last year's projection. Social Security's combined trust funds will run out by 2034, a year earlier than previously forecast. The financial health of America's two most critical safety-net programs, Medicare and Social Security, is deteriorating faster than expected. An annual report released Wednesday, June 18, by program trustees shows that rising health care costs, demographic pressures, and a new law expanding Social Security benefits have accelerated the timeline for when the programs become out of money and cannot pay full benefits. The Medicare hospital insurance trust fund is now expected to run out of money in 2033, three years earlier than projected just last year. Meanwhile, Social Security's combined trust funds, which support retirement and disability benefits, will be depleted by 2034, a year earlier than previously forecast. At that point, beneficiaries would see a significant reduction in monthly payments unless Congress updated projections concern the long-term solvency of these programs, which tens of millions of Americans depend on for health care and income security. The report highlights that Medicare's hospital insurance (Part A) trust fund faces a steeper decline due to higher-than-expected health care expenses in 2024. The fund posted a surplus of $29 billion last year, but deficits are expected to begin after 2027, leading to full depletion by exhausted, Medicare will only be able to cover 89% of inpatient care costs, such as hospital visits, hospice services, and post-hospital nursing care. Currently, about 68 million people are enrolled in Medicare, including Americans over age 65 and those with severe illnesses or Security's combined trust funds, which support retirees and disability recipients, are projected to be depleted by 2034, one year earlier than last year's forecast of 2035. After that date, the program would only be able to pay 81% of scheduled benefits, if no changes are made. This accelerated timeline results in part from the Social Security Fairness Act passed in January 2025. This law repealed the Windfall Elimination Provision and Government Pension Offset, increasing benefits for some workers. Trustees confirmed that this legislative change worsened the trust fund's depletion. Trustees of both programs urged lawmakers to act swiftly. 'Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation,' the report said. Frank Bisignano, the newly appointed Social Security Commissioner, said that stabilizing the trust funds is a top priority for the Trump administration, which has so far pledged not to cut benefits. Despite this, experts warn that without new revenue or cost controls, both programs risk serious disruption. Nancy Altman of Social Security Works argued that lawmakers must decide: raise revenue or cut benefits. 'There are two options for action,' she said. 'Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts.' AARP CEO Myechia Minter-Jordan added that with over 69 million Americans relying on Social Security, 'the stability of this vital program only becomes more important.'The Congressional Budget Office has repeatedly warned that an aging population is the main driver of rising debt related to Social Security and Medicare. The last major Social Security reform occurred about 40 years ago, when the eligibility age was raised from 65 to 67. Medicare eligibility remains at age legislative proposals are currently being considered to address the trust funds' financial outlook. However, none have yet been passed.
Time Magazine
2 days ago
- Business
- Time Magazine
Social Security and Medicare Trust Funds Are on Track to Run Out in Less Than a Decade. Here's What to Know
Social Security and Medicare are expected to need to cut monthly benefits in less than a decade as the trust funds for both programs are on track to run dry earlier than previously predicted. A report released on Wednesday from the Social Security and Medicare Boards of Trustees pushed up the programs' go-broke dates, meaning the point at which they would not have enough money to fully cover benefits. The worsening projections are in part because of a new law impacting Social Security and increasing health care costs, according to the report. Here's what to know about the approaching funding cliffs. How long will Social Security stay solvent? The go-broke date for Social Security's trust funds was pushed up to 2034, from last year's estimate of 2035. The funds cover old age and disability recipients. The program covers more than 60 million people in the U.S. What about Medicare? Last year's report set the go-broke date for Medicare's hospital insurance trust fund as 2036. But the latest report pushed up that date to 2033. Medicare is a federal health insurance program that offers coverage for people 65 and older, as well as people with certain disabilities. More than 68 million people in the U.S. are enrolled in the program. The hospital insurance trust fund pays for Medicare Part A, which covers care provided in hospitals and skilled nursing facilities, as well as some in-home care. It also helps pay for hospice care. Why have the go-broke dates moved up? The report largely attributes the Social Security go-broke date being pushed up to a new law, the Social Security Fairness Act, which took effect in January. The law repealed the Windfall Elimination and Government Pension Offset provisions of the Social Security Act, which 'increased projected Social Security benefit levels for some workers' and affected the go-broke date for Social Security's trust funds, according to the report. Last year's expenses for Medicare's hospital insurance trust fund were also greater than initially anticipated, according to the report, which contributed to the go-broke date for the program being pushed up. What happens after the go-broke dates? The funds hitting their go-broke dates doesn't mean that there won't be any funds to cover any benefits after that point. After 2034, Social Security would only have enough funds to cover 81% of benefits. After 2033, Medicare's hospital insurance trust fund would only be able to pay 89% of costs.
Time of India
2 days ago
- Business
- Time of India
US healthcare almost broke, Medicare and Social Security's trust funds will have no money by this date
The financial health of America's two most critical safety-net programs, Medicare and Social Security, is deteriorating faster than expected. An annual report released Wednesday, June 18, by program trustees shows that rising health care costs, demographic pressures, and a new law expanding Social Security benefits have accelerated the timeline for when the programs become out of money and cannot pay full benefits. The Medicare hospital insurance trust fund is now expected to run out of money in 2033, three years earlier than projected just last year. Meanwhile, Social Security's combined trust funds, which support retirement and disability benefits, will be depleted by 2034, a year earlier than previously forecast. At that point, beneficiaries would see a significant reduction in monthly payments unless Congress intervenes. The updated projections concern the long-term solvency of these programs, which tens of millions of Americans depend on for health care and income security. Medicare's Trust Fund to Be Exhausted by 2033 Live Events The report highlights that Medicare's hospital insurance (Part A) trust fund faces a steeper decline due to higher-than-expected health care expenses in 2024. The fund posted a surplus of $29 billion last year, but deficits are expected to begin after 2027, leading to full depletion by 2033. Once exhausted, Medicare will only be able to cover 89% of inpatient care costs, such as hospital visits, hospice services, and post-hospital nursing care. Currently, about 68 million people are enrolled in Medicare, including Americans over age 65 and those with severe illnesses or disabilities. Social Security Set to Pay Reduced Benefits by 2034 Social Security's combined trust funds, which support retirees and disability recipients, are projected to be depleted by 2034, one year earlier than last year's forecast of 2035. After that date, the program would only be able to pay 81% of scheduled benefits, if no changes are made. This accelerated timeline results in part from the Social Security Fairness Act passed in January 2025. This law repealed the Windfall Elimination Provision and Government Pension Offset, increasing benefits for some workers. Trustees confirmed that this legislative change worsened the trust fund's depletion. Urgency Builds for Legislative Action Trustees of both programs urged lawmakers to act swiftly. 'Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation,' the report said. Frank Bisignano, the newly appointed Social Security Commissioner, said that stabilizing the trust funds is a top priority for the Trump administration, which has so far pledged not to cut benefits. Despite this, experts warn that without new revenue or cost controls, both programs risk serious disruption. Nancy Altman of Social Security Works argued that lawmakers must decide: raise revenue or cut benefits. 'There are two options for action,' she said. 'Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts.' AARP CEO Myechia Minter-Jordan added that with over 69 million Americans relying on Social Security, 'the stability of this vital program only becomes more important.' Demographics and Debt Add Pressure The Congressional Budget Office has repeatedly warned that an aging population is the main driver of rising debt related to Social Security and Medicare. The last major Social Security reform occurred about 40 years ago, when the eligibility age was raised from 65 to 67. Medicare eligibility remains at age 65. Several legislative proposals are currently being considered to address the trust funds' financial outlook. However, none have yet been passed.
Axios
2 days ago
- Business
- Axios
Social Security trust fund to run out in 2034, a year earlier than thought
The Social Security trust fund is on track to run out of money in nine years, its trustees said in a new report Wednesday, a year sooner than the last projection. Why it matters: The U.S. faces a major fiscal reckoning in the early 2030s, as retirement benefits would be on track to be slashed automatically, if Congress does not act to preserve the benefits on which millions of Americans rely. A law enacted at the start of this year expanding Social Security for railroad and public pension recipients was the main reason for the quicker drawdown. By the numbers: The new Social Security and Medicare Trustees report, the government's formal annual estimate of the programs' finances, finds that the trust fund for the Social Security retirement program is set to go bust in 2033, the same as last year. At that time, its incoming tax revenues would be enough to pay only 77% of scheduled benefits, barring a change by Congress. Combining the old-age and disability programs would buy future Congresses another year, with the combined programs able to pay 81% of scheduled benefits starting in 2034 — not 2035, as estimated a year ago. State of play: The trustees attributed the earlier shortfall in large part to the Social Security Fairness Act, passed by large bipartisan majorities and signed by former President Biden on Jan. 5. The trustees also cut their estimates of fertility rates and adjusted their estimate of the long-term share of GDP paid as wages. Of note: Medicare's hospital insurance trust fund is also scheduled to run out in 2033, three years earlier than reported last year, and would then only be able to pay 89% of benefits absent changes. Speaking with reporters Wednesday, a government official said Wednesday that hospital usage surged in 2024 after lower rates in the immediate aftermath of the pandemic. "Was that foregone services from the COVID-related experience… or is there some broader change in terms of how health care is being dispensed?" the official said. "Obviously something we will continue to monitor."
