K-12 Tax & Spending Climate: Trustees Show Need for Social Security, Medicare Reforms

Concord Coalition:

According to the trustees, the general revenue subsidies for Social Security and Medicare will total $311 billion in 2017 — $27 billion for Social Security and $284 billion for Medicare. By 2027, the general revenue subsidy for both programs combined jumps to $971 billion.

The rising costs can be attributed to large numbers of retiring baby boomers, the lengthening American lifespan, and the continuing growth of health care costs. All this means the government must pay more each year just to provide the same level of services to more beneficiaries.

The trustees’ projections on how long the Medicare and Social Security trust funds will remain solvent often receive considerable public attention. Today’s reports say the Social Security trust funds will be exhausted in 2034, the same as last year’s report, while Medicare’s Hospital Insurance fund will be exhausted in 2029, one year later than projected last year.

It is important to remember, however, that the trust funds are merely internal government accounting mechanisms that do not provide meaningful information about these two programs’ sustainability as their growth puts increasing pressure on the overall federal budget.