(Bloomberg News) The budget outlook for Social Security is getting dimmer, the U.S. government said, with its primary trust fund now projected to run dry three years sooner than anticipated.
The fund that helps finance benefits for 44 million senior citizens and survivors of deceased workers will be exhausted by 2035, the program's trustees said in an annual report yesterday. Aid would have to be cut at that point if Congress doesn't intervene.
Social Security's disability program, which helps support 11 million Americans, will run through its trust fund in 2016, two years earlier than predicted. The report attributed the fiscal stress in part to the weak economy.
The main trust fund that supports the Medicare health-care program for the elderly will run out of money in 2024, the report said.
The giant retirement programs are straining the U.S. government's finances, and what to do about them is a central issue in the election-year debate between Democrats and Republicans as President Barack Obama seeks a second term.
"Millions of Americans rely on Social Security and Medicare for income and for health care, and millions more will do so in the future," said Treasury Secretary Timothy Geithner, one of the programs' six trustees. "These programs have the resources they need to fulfill their commitments to the American people for years to come. But what these reports also reinforce is that we must take steps to keep these programs whole for the future."
Combined Trust Funds
The combined Social Security retirement and disability trust funds would be depleted in 2033, three years earlier than projected. After that, incoming revenue would be enough to cover only three-quarters of scheduled benefits.
House Republicans have proposed replacing Medicare with government subsidies to help seniors buy private insurance. Democrats and the Obama administration rejected that plan and have said they want to find ways to shore up the traditional program.
Neither side has offered a plan for Social Security, which at a 2011 cost of $736 billion is the U.S. government's largest single program.
Lawmakers traded shots over the report. House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, said "rather than work together to advance solutions, the president has opted to play politics with seniors' care" by distorting "efforts to save and strengthen Medicare."