Social Security this year will spend more than it takes in, the program's trustees said in a new report Tuesday that signals the official beginning of the program's slide into insolvency. Good advisors have been factoring uncertainty around Social Security into their clients' plans for many years now. But when interest income is excluded from the equation, program costs exceed income throughout the 75-year projection period. The program provides health insurance to some 60 million people, most of whom are over 65 years old. It's also the unpredictability of health care costs, which can be jolted by high-priced breakthrough cures, and which regularly outpace the overall rate of economic growth. None of those top officials was present today; an aide cited scheduling conflicts. Some 45 million retirees and six million dependents receive Social Security benefits. Trustees for the retirement and disability program revealed on Tuesday that Social Security will no longer be able to meet its obligations to beneficiaries starting in in 2034, or 16 years from now - which is less time than has elapsed since terrorists slammed airplanes into the World Trade Center and the Pentagon in 2001. And the trustees now say that program is going to be insolvent in 2026 - or roughly the same time as we are from the passage of Obamacare.
The Congressional Budget Office said in April that federal deficits and debt would soar in the coming decade, following passage of the tax overhaul and legislation to increase military and domestic spending. The White House said the cuts would offset the initial drop in government revenue by spurring greater economic growth.
Mitch McConnell cancels Senate's August recess
House Speaker Paul Ryan, R-Wis., has not shared McConnell's enthusiasm for canceling the August recess. Trump has routinely accused the opposition party of slow-walking Senate confirmation of his nominees.
Higher deficits would leave less maneuvering room for policymakers when the day of reckoning finally arrives for Social Security and Medicare.
"The continued delay in enacting legislative repairs renders effective solutions more elusive and poses particular risks to economically vulnerable populations", Charles Blahous and Robert Reischauer, both former public trustees of the Social Security and Medicare Trust Funds, wrote in a joint report published by the Bipartisan Policy Center in advance of the trustees report. That money is invested in special government securities, which also collect interest. Their formula is likely to involve tax increases to help keep the programs solvent.