WASHINGTON — The trust fund for Social Security will go broke in 2041 — a year earlier than previously estimated — the trustees reported Wednesday. Trustees also said that Medicare, the giant health care program for the elderly and disabled, faces insolvency in 2020.
Other political news of note
The new projections made in the trustees annual report were certain to be cited by both sides in the massive battle to overhaul Social Security, which President Bush has made the top domestic priority of his second term.
The go-broke date for Medicare was delayed by one year, compared to the estimate that trustees gave a year ago.
The insolvency dates represent when both trust funds will have exhausted the government bonds that have been building up to take care of the pending retirement of 78 million baby boomers.
However, the more important dates are when Social Security and Medicare begin paying out more in benefits than they are receiving in taxes because that represents the time the government must start redeeming the bonds in the trust fund. To do that, the government will have to increase its borrowing on financial markets, raise taxes or divert money from other government programs.
For Medicare, the threshold when benefits exceed program income occurred last year.
For Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year’s report.
That change is certain to be cited by the administration as a sign of the urgency to act to deal with Social Security’s funding woes. Democrats argue that the real crisis is in Medicare and that the administration is ignoring the health care crisis.
© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.