Fix the Debt Reacts to the Social Security Trustees Report

The Social Security and Medicare Trustees released their annual reports today showing that despite modest improvements in their projections, both programs are in financial jeopardy. The Trustees project the Social Security Old Age and Survivors Insurance program to exhaust its reserves by 2035, the Medicare Hospital Insurance trust fund to be depleted by 2030, and the Social Security Disability Insurance to become insolvent by late 2016. On a combined basis, the Trustees project the Social Security program to run out of reserve funds by 2034, which is a year later than previous projections but less than two decades from today. At that point, all beneficiaries would face an immediate 21 percent benefit cut, which would grow over time to a 27 percent cut.

"How many times do the Trustees need to warn us about this before we take their concerns seriously?" said former Sen. Judd Gregg, co-chair of the Campaign to Fix the Debt. "2034 is not that far away - it means today's 60-year-olds will be 79, and today's 48-year-olds are just reaching the normal retirement age. And the cost of waiting will only make the fixes harder. We don't need to shore up this program just for our children; we need to do it for ourselves as well."

According to the Social Security Trustees, the combined programs face a shortfall of 2.68 percent of payroll - meaning the 12.4 percent payroll tax would need to be increased by just over one-fifth or benefits cut immediately for all current and future beneficiaries by about one-sixth to make the program solvent for 75 years. By the 75^th year, the Trustees project the combined shortfall will grow to 4.7 percent of payroll.

"The message the Trustees delivered today should resonate all over the country and especially in the presidential campaign," said Fix the Debt Co-Chair and former Gov. Ed Rendell. "The disability program is only a year from insolvency and the other programs aren't far behind. If we don't fix these programs soon, it's the most vulnerable who will pay the price. We need a sense of urgency in Washington to fix these programs so they are sound and secure now and in the future."