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.
Meanwhile, Medicare's hospital insurance trust fund is expected to run dry in 2026, three years earlier than what the trustees had predicted in last year's report.
That's what the Social Security and Medicare trustees projected in their 2018 annual report 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. A 2015 budget agreement extended the solvency of the Social Security Disability Insurance trust fund by temporarily allocating a larger share of the payroll tax to fund the disability program, which was in danger of imminent depletion.
The twin warnings come as Congress has cut revenue and boosted spending - moves that, analysts say, will leave the government's finances struggling for years to come.
President Trump pledged during the 2016 campaign to leave Social Security and Medicare benefits untouched, putting him on a crash course with Republicans on Capitol Hill who have said they wanted to tackle the programs' problems by limiting future benefit increases.
Sixty-two million people, including 45 million retired workers, were receiving OASDI benefits at the end of 2017.
The combined Social Security trust funds are slated to run dry in 2034, and that will force benefits to be cut more than 20 percent.
Treasury Secretary Steven Mnuchin said the latest report shows that Social Security and Medicare remain secure, but long-term problems persist. Trustees for the retirement and disability program revealed on Tuesday that Social Security will no longer be able to meet its obligations to beneficiaries starting in in 2034, or 16 years from now - which is less time than has elapsed since terrorists slammed airplanes into the World Trade Center and the Pentagon in 2001.
The report says the other trust fund, which covers Medicare Parts B and D, is expected to be financed through the next 10 years and beyond.
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. The program's cost will rise more rapidly through 2039 as the baby-boom generation retires faster than the number of covered workers increases, according to the report.