Medicine

Social Security says system's costs will exceed income this year

Social Security says system's costs will exceed income this year

The combined reserves of the Social Security trust funds are expected to be depleted in 2034, the same time frame projected a year ago, according to the latest annual report from the Social Security and Medicare Board of Trustees released Tuesday.

Costs to the fund will also be slightly higher than last year's estimates, "mostly due to higher-than-expected spending in 2017, legislation that increased hospital spending and higher Medicare Advantage payments", the trust fund report said.

"As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years", the report said.

For Social Security, the last time the program ran an annual deficit was in 1982, before President Reagan signed changes that set it on firmer footing for the next 30 years.

Social Security covers 62 million people, split among retired workers and their dependents, survivors of workers who've died and disabled people.




Worse, by 2034, those reserves will be drained to the point where Social Security will have to reduce recipients' scheduled benefits. It's also the unpredictability of health care costs, which can be jolted by high-priced breakthrough cures, and which regularly outpace the overall rate of economic growth. That's the amount the Social Security's trustees said tax income alone could cover. Medicare Part B, which covers outpatient visits, and Part D, which pays for most prescription drugs, are paid for in part by general revenue and by individuals' premiums. None of those top officials was present Tuesday; an aide cited scheduling conflicts. The public trustee posts are now unfilled.

But speaking to reporters on Tuesday, Treasury officials said the cuts were set to decrease revenues for both programs.

Democrats have for months asserted that Republicans would use the deficit - swollen by tax cuts - as "an excuse to cut Social Security and Medicare", in the words of Senator Chuck Schumer of NY, the Democratic leader.

But federal deficits keep rising, and the recent Republican tax-cut bill is only expected to add to the debt.

Most Social Security reform proposals call for a combination of increasing payroll taxes and cutting benefits, including recommendations to raise the full retirement age or scale back on inflation protections.