The Social Security program will pass an ugly milestone this year, as its costs exceed its income, according to its trustees.
The program is now expected to deplete its funds by 2026, down from last year's estimate of 2029.
Medicare, the program that provides health care for older Americans and those who are disabled, is covered by two big trust funds. But when interest income is excluded from the equation, program costs exceed income throughout the 75-year projection period.More news: Rafael Nadal trails Diego Schwartzman before rain ends play at French Open
"The current trajectories in health spending are both unsustainable and unmatched by increases in quality", Alex M. Azar II, the secretary of health and human services and a trustee of Medicare and Social Security, said on Tuesday.
The report says Social Security will become insolvent in 2034.Unless lawmakers act, both programs face the prospect of being unable to cover the full cost of promised benefits.
The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the USA government to dip into the retirement system's trust fund to pay benefits to participants. With Social Security that could mean sharply reduced payments for some retirees, many of whom are already on tight budgets.
But speaking to reporters on Tuesday, Treasury officials said the cuts were set to decrease revenues for both programs.More news: Guatemala toll rises to 73 after strong explosion
The White House claims the long-running economic boom will help secure Medicare and Social Security's future.
Rather than cutting benefits, the Democratic-leaning Social Security Works coalition supports expanding benefits as a solution to the nation's looming retirement crisis by asking the wealthy to contribute more.
House Speaker Paul Ryan, R-Wis., has always been an advocate for overhauling the programs, introducing a voucher-like system for Medicare and calling for partially privatizing Social Security.
"As in past years, the trustees have determined that the fund is not adequately financed over the next 10 years", the report said, citing in part lower payroll taxes collected on lowered wages in 2017 and rising hospital spending.More news: LeBron James will meet with Warriors in free agency
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