Every year the Social Security Trustees put out a report describing the financial health of the program, which is funded partly by worker and employer contributions which end up in a trust fund and partly by general taxes. The trust fund has been in serious trouble for a couple of decades and it is getting worse, particularly as we allow more and more people to claim they are “disabled” and entitled to payments. Demographics are bad, as the population ages, the post-war generation retires and there are fewer young workers. This year’s report repeats the dismal refrain about the program’s future.
Social Security will be unable to pay full benefits due by 2033, the same time frame projected last year. After than, the incoming annual income from contributions will allow payment of 77% of benefits. Changes have to be made now if this is to be avoided. The changes are obvious, as I keep repeating. Raise the age of benefit eligibility gradually to 70. Stop giving benefits to people who have a certain income or wealth level. Eliminate social security disability and leave it up to the states to determine who is disabled and what kind of income subsidy, if any, they need. Transfer the assets from the disability fund to the general Social Security fund.
The report also looked at the status of Medicare’s funding. The trust fund for Part A–hospital benefits–also runs out of funds in 2033 and ongoing contributions will be sufficient to pay 89% of costs. The other parts of Medicare are better funded because they rely on beneficiary contributions and general revenues, but that is stressing both consumers and taxpayers.
This should have been fixed years ago, but politicians are gutless weasels. (SS Trustee Report)
