WASHINGTON — Improved performance by the U.S. economy has prompted the federal government to push back its projections for when Social Security and Medicare could run out of money.

Annual reports issued this week by trustees to the two programs still warn that policy changes are needed to avoid cuts in benefits down the road.

As it stands now, without changes Social Security is projected to be unable to pay full benefits in 2035, the trustee report said. That’s one year later than last year’s estimate.

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“This year’s report is a measure of good news for the millions of Americans who depend on Social Security, including the roughly 50% of seniors for whom Social Security is the difference between poverty and living in dignity — any potential benefit reduction event has been pushed off from 2034 to 2035,” Social Security Commissioner Martin O’Malley said in a statement.

“More people are contributing to Social Security, thanks to strong economic policies that have yielded impressive wage growth, historic job creation, and a steady, low unemployment rate. So long as Americans across our country continue to work, Social Security can — and will — continue to pay benefits,” O’Malley said. “Congress can and should take action to extend the financial health of the trust fund into the foreseeable future, just as it did in the past on a bipartisan basis. Eliminating the shortfall will bring peace of mind to Social Security’s 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation.”

Medicare trustees reported the go broke date for the hospitalization program is now sometime in 2036, five years later than previously projected.

“Hospitalization Insurance income is projected to be higher than last year’s estimates because both the number of covered workers and average wages are projected to be higher,” the report said.

The Social Security program pays benefits to about 71 million people — including retirees, people with disabilities and children. In 2023, Medicare covered 66.7 million people: 59.1 million aged 65 and older, and 7.6 million with disabilities.

Lawmakers have long argued what to do about Social Security’s and Medicare’s funding issues without coming up with a solution.

Jo Ann Jenkins, CEO for AARP (formerly the American Association of Retired Persons), said Congress must act. “The stakes are simply too high to do nothing,” she told The Associated Press.

Michael A. Peterson, CEO of the Peter G. Peterson Foundation, told the AP that “the longer Congress delays reform, the more challenging the options become, and these programs are too important to continue to let them drift toward insolvency. There are many solutions available to strengthen Social Security and Medicare, and it’s critical that Congress provide greater certainty and stability for the future.”

President Joe Biden responded to the reports with a pledge to fight any efforts to cut benefits by Congressional Republicans and calling for wealthier Americans to pay more.

“Medicare is stronger and Social Security remains strong. As long as I am President, I will keep strengthening Social Security and Medicare and protecting them from Republicans’ attempts to cut benefits Americans have earned,” Biden said in a statement. “My plan would extend Medicare solvency permanently by asking the wealthy to pay their fair share and lowering prescription drug costs. And I am committed to extending Social Security solvency by asking the highest-income Americans to pay their fair share without cutting benefits or privatizing Social Security.”

© 2024 Advance Local Media LLC
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