The Social Security and Medicare trust funds will not be able to pay all debts inside of 20 years unless Congress acts, an annual report by the Treasury Department predicted.
The forecast was included in a 269-page trustee's report released Thursday. It means that by 2034, the program will have enough revenue to cover only 77 percent of promised Social Security and Medicare benefits.
"The trajectory is still alarming," said Secretary of Health and Human Services Tom Price. "The bottom line is it must be addressed."
In the period from 2018-2027, Social Security will run deficits totaling $1.4 trillion, and $4.9 trillion in the following decade, the report said.
The non-government organization Committee for a Responsible Federal Budget, in a response to the report, noted that the Social Security Administration will pay out $27 billion more in benefits in 2017 than it will generate in tax revenue. It added that the Disability Insurance trust fund will run out of reserves by 2028, and that failure to address the problem soon will lead to all Social Security beneficiaries seeing a cut in benefits within 17 years.
"Social Security insolvency is no longer a problem only for future generations. Without action, current workers and even current retirees will face a 23 percent, across the board cut in just 17 years. That is when today's 50-year-olds reach the normal retirement age and today's youngest retirees turn 79," said Maya MacGuineas, CFRB's president.
The trustee's report also said that Social Security beneficiaries are projected to receive a 2.2 percent increase in their monthly payments, as a cost of living adjustment, in 2018. The official increase will be announced in October.
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