Here's the bottom line from this year's Trustees Report:
  • Social Security is still fully funded for 28 years
  • No COLA increase planned for retirees
  • Skyrocketing health costs nationwide continue to threaten Medicare
Undoubtedly, these facts truths will probably be buried in coverage of this year's Trustees report as the anti-entitlement crowd revs up its billion dollar engine to convince the media and Americans that this time there really is a crisis.  They're using the recession and new math as the foundation for the same old crisis calls. Michael Lind did a wonderful piece on Salon on the Trustees report and the well-financed crisis campaign against Social Security and Medicare.       Our President Barbara Kennelly says:
"Contrary to alarmists' claims of impending doom for Social Security, this Trustees Report confirms what we already know-Social Security will weather this recession, continuing to provide vital benefits for millions of retirees.  I'm sure this 4 year adjustment will rally the doom and gloom crowd, which has been claiming there's a crisis for years.  But let's not forget, today's report projects Social Security will pay full benefits for nearly 30 years which is almost a decade more than the trustees predicted just twelve years ago."

Fact: The 2009 Trustees report shows Social Security is not facing an immediate threat. 

  • Trustees project Social Security will be able to pay full benefits until the year 2037. After that, Social Security will have sufficient revenue to pay 76% of benefits. 
  • The change in short-term projections is a fiscal problem, not a Social Security problem. Social Security's trust fund surplus is not disappearing as some have claimed. What is happening is the annual cash surpluses collected in payroll taxes are below last year's projections due to the economic downturn. Moreover, Trustees report a healthy $2.6 trillion in accumulated Social Security assets and project that, even after factoring in the effects of the recession, full benefits will be paid for another 38 years. 
  • Low inflation could mean two years of no cost of living increases for beneficiaries.  By statute, zero COLA's would also mean no Medicare Part B premium increase for about three-quarters of all beneficiaries.  However, the remaining beneficiaries, including newly enrolled seniors and higher income seniors, will see larger premium hikes in Part B to cover the difference.  Premiums for Part D, the prescription drug benefit, are not subject to this limitation and are expected to continue increasing by 11% annually through 2018.     
  • Fact: The 2009 Trustees report shows the persistent and rapidly rising cost of health care continues to threaten Medicare
  • Trustees project Medicare's Part A Trust Fund, which covers hospital services, will be exhausted in 2017. The cost of Medicare Part B is projected to increase by 8.5-9% annually, and Medicare Part D by 11% - more than double the projected 4.5% growth in GDP over the next decade. 
  • We must effectively address long-range cost containment across all public and private health care systems. Actuaries project that 67% of the average senior's Social Security benefit check will be consumed by Medicare out-of-pocket costs by 2080.
  • Some of the Medicare cost savings recommended to Congress by the Obama administration should be reinvested into the program to: lower drug prices through government negotiation, close the prescription drug doughnut hole and limit seniors' out-of-pocket costs
  • Barbara told reporters today:
    "Reforming health care is vital to our nation's long-term economic health...system-wide and in the Medicare program. At least some of the savings proposed in Medicare should be reinvested to improve the nation's largest health care provider.  We must seize this historic opportunity to improve the quality of care to all Americans, young and old alike"
    You can see our detailed analysis of this year's Trustees report here.