Benefits at risk: Trustees say Social Security and Medicare are going to run dry

Social Security and Medicare will be totally insolvent in fewer than 19 years, according to annual reports on the state of the entitlement programs released Wednesday.

The annual trustee reports indicate that Social Security retirement and disability trust funds will be depleted by 2034 as the 6.2 percent annual payroll tax on both employees and employers is increasingly unable to keep up with demand for the entitlement funds. That’s despite a reported drop in overall health spending.

“Notwithstanding the assumption of a substantial slowdown of per capita health expenditure growth … Medicare still faces a substantial financial shortfall,” the trustees said in the report.

As early as next year, meanwhile, the Social Security Disability Insurance Trust Fund will be able to cover only about 81 percent of its payments because of insolvency.

The reports indicate that Medicare Hospital Insurance Trust Fund will be able to cover its financial obligations through 2030.

Medicare is currently adding around 10,000 new beneficiaries to its doles daily as more and more baby boomers reach age 65.

In a statement to reporters, Treasury Secretary Jack Lew said that the entitlement programs are “secure today and will remain secure in the years to come.” But as Medicare turns 50 and Social Security 80 later in the summer, Lew and Obama administration officials are urging rapid congressional action to close the shortfall.

“Lawmakers should take action sooner rather than later to address these structural shortfalls, so that the uncertainty now facing disability beneficiaries will not eventually be experienced by other programs’ participants,” the trustee report said.

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