The insolvencies of Social Security’s Old Age and Survivors Insurance and Medicare’s Hospital Insurance trust funds have been delayed by a year since 2016, the funds’ trustees predicted Thursday.
Social Security beneficiaries would get a 25 percent cut in scheduled benefits from 2035 to 2091 without fixes, the trustees reported.
At the same time, the time before the Social Security’s Disability Fund runs out of money has been lengthened five years to 2028, in at least partial measure because fewer-than-expected Americans have filed claims.
These beneficiaries would also see a 25 percent reduction in benefits from the start of insolvency to 2091 if changes are not made to the program.
A year ago, the main Social Security fund was expected to be depleted in 2034. The bankruptcy has been pushed forward to 2035.
For the Medicare Hospitalization Fund, the trustees have added a year of solvency, to 2035.A lower-than-expected rise in health treatment costs was given as an explanation.
Treasury Department Secretary Steve Mnuchin, who is the managing trustee of the funds, blamed tepid economic growth, rising health-care costs and the aging population for the Social Security and Medicare shortfalls.
“Persistent and strong economic growth can help bring these programs to (sustainability), Mnuchin said.
He added tax and regulatory reform could aid their solvencies.
The Treasury secretary joined with the trustees to urge Congress to fix the financial challenges for the programs sooner rather than later so people have adequate time to prepare.