Last week Social Security and Medicare trustees released a chilling report that documented the dire financial straits of the programs they oversee. According to the trustees, Social Security will start taking in less money than it sends out in 2016 and by 2037 the fund will go bust, four years earlier than anticipated. Also, Medicare’s hospital fund is already running a deficit and is now in danger of going bust by 2017.
Social Security and Medicare are two of the largest federal government programs. Social Security provides an array of services for disabilities, child insurance, and most importantly, a supplemental income to retiring Americans. Medicare helps to cover hospital costs and medical costs for senior citizens, including a generous prescription drug benefit that the Bush administration added to the program in 2004. The point of these two programs was to prevent seniors from falling into poverty when they were no longer working.
Solutions to these programs have been advocated before by think tanks and task forces. However, Congress has long delayed looking into reforming these programs because of the unpopularity such moves would cause.
This brief will explain the current fiscal status of these programs and why they are in dire straits, proposed changes to these programs, and political impact the dire status of these programs could have in the near future.