New Analysis Says Social Security/Medicare in Worse Shape Now than Earlier This Year
Back in April the Social Security and Medicare Trustees released their reports with projections of the financial outlook of the programs. Those annual reports give the official government projections for the programs. It is important to note that the projections were made prior to the onset of the Covid-19 pandemic and therefore did not include the effects the pandemic has had on the economy and ultimately on the two programs.
The Medicare report estimated the Hospital Insurance Trust Fund will become depleted in just six more year.
The Social Security report projected the combined reserves of the Old Age, Survivor and Disability trust funds would be depleted in 2035, resulting in across-the-board benefit cuts of about 21% unless Congress stepped in before then.
In addition, the Congressional Budget Office (CBO), a federal agency within the legislative branch, does its own forecast of the programs. The CBO produces independent analyses of budgetary and economic issues to support the Congressional budget process. Each year, the agency’s economists and budget analysts produce dozens of reports and hundreds of cost estimates for proposed legislation.
CBO is strictly nonpartisan; conducts objective, impartial analysis; and hires its employees solely on the basis of professional competence without regard to political affiliation. CBO does not make policy recommendations, and each report and cost estimate summarizes the methodology underlying the analysis.
The CBO said earlier this year that if the Congress did not take action to address the shortfalls, the balances in the two trust funds would be exhausted within the next 10 years: Medicare’s Hospital Insurance (HI) Trust Fund (in fiscal year 2024), and Social Security’s Disability Insurance (DI) Trust Fund (in fiscal year 2026)
CBO’s current estimate of the Old Age and Survivor’s Insurance fund’s exhaustion date is 2031, one year earlier than its estimate was in 2019. If current laws generally did not change, CBO estimated the balance of the Disability Insurance fund would be exhausted in 2026.
However, a new analysis by the Bipartisan Policy Center was just released that has its own updated forecast that includes the effects of the pandemic.
That report estimates the Social Security trust fund could be depleted by 2030, five years earlier than the official government estimate, because of the recession and long-term near-zero interest rates triggered by the pandemic.
Even under the most optimistic economic projections, the fund could run out of money by 2034, the report said.
Social Security is the largest single source of income for older Americans, providing the majority of income for half of retirees, and at least 90% of income for 18% of retirees, according to another think tank, the Center on Budget and Policy Priorities.
We want to emphasize that these are all projections based on the economic situation at the time they were developed. As we have seen in the past year, things can change dramatically and clearly, we still don’t know how things will be in the coming months and year with regard to the pandemic.
But one thing is clear: Congress and the President, whoever his is, will have massive issues to deal with, not the least of which will be the future solvency of Social Security and Medicare. Our political leaders have to stop avoiding dealing with these tough issues. They can’t continue to “kick the can down the road.”
You can depend on TSCL to be in the middle of the fight to secure Social Security and Medicare and make sure we all receive the benefits we depend on and that we have already paid for during our working years.
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Drug Discount Card Update
We have reported several times in the last few weeks on President Trump’s promised $200 drug discount card for seniors.
Last week we learned that the top attorney in the Department of Health and Human Services (HHS), warned department officials that the program is potentially illegal because it could be in violation of federal election laws.
Now, the Associated Press has reported that one administration official has said the odds are 75-25 that the program will not happen at all.
On the other hand, Bloomberg News has reported that, “The White House is backing away from a plan to send $200 prescription drug discount cards to American seniors before Election Day after widespread criticism the effort could violate election laws.
“’I don’t anticipate that anything gets there before Election Day,’ Chief of Staff Mark Meadows told reporters Wednesday. ‘I think that was a concern that there might have been a look that this was done for a political motivation. That’s not the case.’”
Bloomberg also said the administration is still moving forward with the plan and that the cards will likely be sent in November or December.
We will update you whenever we have additional information.
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New Report Issued About Mask Wearing
Back in April, President Trump picked out a single computer model of coronavirus spread to use for guidance about the coronavirus. It turns out that that model initially had rosier estimates than others, and it projected many fewer Covid-19 deaths.
However, the statisticians behind it at the University of Washington have since changed their methods, and they now estimate that doing away with social distancing measures could entail vast numbers of deaths, and that widespread mask-wearing in public could save tens of thousands of lives.
Their new estimate says that universal masking in the U.S. could save some 130,000 lives by the end of February.
White House officials and public health leaders said they don’t expect a vaccine to be widely available until March or April, which means wearing masks and other non-pharmaceutical measures will likely be the only option to reduce the spread of the virus until the end of February.
We urge you to keep wearing a mask if you been doing so, and if you haven’t, please start – for your own safety and the health and safety of those around you.
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In spite of the coronavirus emergency, TSCL is continuing its fight for you to protect your Social Security, Medicare, and Medicaid benefits. We've had to make some adjustments in the way we carry on our work, but we have not, and will not stop our work on your behalf.
Our nation is in a hyper-partisan period as the November elections approach. In this environment it becomes tricky when reporting about issues that affect you and other TSCL supporters because the issues are so often intertwined with politics.
We want to assure you that we will try to report the facts as we understand them and keep elective politics out of it.
For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit the Bill Tracking section of our website or follow TSCL on Twitter.