New Report Warns Medicare and Social Security Running Out of Cash

Health and Human Services Secretary Alex Azar is one of the trustees overseeing Medicare

For Social Security, the last time the program ran an annual deficit was in 1982, before President Reagan signed changes that set it on firmer footing for the next 30 years.

The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the US government to dip into the retirement system's trust fund to pay benefits to participants.

"The programs remain secure", Mnuchin said. Last year's tax-cut package reduced both Medicare and Social Security's projected revenue over the next few years.

Worse, by 2034, those reserves will be drained to the point where Social Security will have to reduce recipients' scheduled benefits.

In 2017, Medicare covered 58.4 million people, with 49.5 million older than 65.

Of the two programs, Medicare faces the greatest fiscal challenges as medical costs increase and the USA ages, with many baby boomers set to retire in the next several years.

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Challenges for both programs are exacerbated by the aging of the baby boomer population, without an equivalent proportion of workers available to replace them in the workforce.

The trustees forecast that 100% of benefits will be covered through 2034, after which the trust funds for Social Security, which also cover old age and disability insurance programs, will only be able to cover about 79% of benefits.

"The current trajectories in health spending are both unsustainable and unmatched by increases in quality", Alex M. Azar II, the secretary of health and human services and a trustee of Medicare and Social Security, said on Tuesday. Government economic experts who briefed reporters Tuesday said the tax bill and other recent legislative changes from Congress on balance worsened the condition of both programs.

President Donald Trump says he won't cut Social Security or Medicare, but hasn't offered a rescue plan for the long run.

Democrats want to expand the safety net by spending more on health care and education. But when the money is actually needed to pay for benefits, economists say a government deep in debt could be hard pressed to make good.

House Speaker Paul Ryan, R-Wis., has always been an advocate for overhauling the programs, introducing a voucher-like system for Medicare and calling for partially privatizing Social Security.

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