Social Security and Medicare Get Boost From Stronger US Economy, But Funds Expected to Run Short in 2035

By Madz Dizon

May 06 2024, 22:19 PM EDT

Social Security Payment Worth Up to $4,873: Who's Eligible to Receive on July 10? — Blank Social Security checks are run through a printer at the U.S. Treasury printing facility February 11, 2005 in Philadelphia, Pennsylvania. As U.S. President George W. Bush travels the country to stump for his plan to change the Social Security system. William Thomas Cain/Getty Images

A new report issued a warning on Monday, stating that Social Security and Medicare will exhaust their funds in a little over ten years.

This report adds to the mounting pressure on Congress to tackle the country's financial stability, especially as federal debt continues to increase and the population ages.

Congress Urged to Act Swiftly on Social Security Deficit

If Congress does not take action sooner to stop that deficiency, 83% of benefits will be payable on the estimated depletion date.

The Social Security trustees attributed the minor improvement in the program's prognosis to increased program participation in the midst of a robust economy, low unemployment, and faster job and income growth.

According to CNBC, the program's funding was estimated by the trustees to endure until 2034, at which point 80% of benefits would become due, last year.

Every year, the Social Security as well as Medicare programs pay out more in benefits compared to the payroll taxes that fund them into the government.

As a result, the programs rely on reserves to make up the difference. However, once the trust funds are exhausted, the programs will no longer be able to provide full benefits.

Stress Urgency for Social Security and Medicare Solvency

According to experts, it is crucial to address the solvency of both Social Security and Medicare sooner rather than later, despite the slight increase in projected depletion dates, as lawmakers have a bit more flexibility.

As stated by Bill Sweeney, the senior vice president of government affairs at AARP, the matter is of great importance to members aged 50 and above.

Sweeney said a significant portion of families aged 65 and older depend on Social Security for a significant portion, if not all, of their income.

Both President Joe Biden and Former President Donald Trump have yet to release proposals addressing Social Security's financial situation.

According to Washington Post, Biden has expressed his intention to increase taxes for individuals earning over $400,000 and allocate the additional revenue to the Social Security Trust Fund.

Throughout his previous two State of the Union addresses, the president has consistently expressed strong resistance towards reducing social safety net benefits.