Federal officials said they expect Social Security will deplete its combined reserves and run out of money to fully pay beneficiaries in 2035.
Stronger-than-expected economic growth helped boost the financial health of Social Security and Medicare over the past year, though the safety-net programs will still face a funding crisis in about a decade, according to the government’s latest projections.
The better-than-anticipated economy also buoyed the financial health of the trust fund that pays Medicare’s hospital bills. The latest estimate finds that those reserves will be depleted in 2036, which is five years later than last year’s projection. Without congressional intervention, the program will then be able to pay only 89 percent of scheduled benefits.
But Max Richtman, president of the National Committee to Preserve Social Security & Medicare, said “Congress must act deliberately, but not recklessly” in response to the latest projections. “A bad deal driven by cuts to earned benefits could be worse than no deal at all,” he said in a statement. Biden has vowed to block any efforts to cut Social Security and Medicare, and his most recent budget called for increasing taxes on people earning more than $400,000 to shore up the solvency of the programs.
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