Hold the Rhetoric, Pass the Truth on the 2014 Trustees Report
“This year’s projections come as no surprise to anyone who understands how Social Security and Medicare work. In fact, historically, the solvency date for the Social Security Trust Fund has fluctuated from a depletion date as distant as 2048 in the 1988 report to as soon as 2029 predicted in 1994 and 1997. On Medicare, each year since passage of the Affordable Care Act, the Trustees have reported the program’s improving solvency, this year adding an additional four years until 2030. We should build on that success and continue reducing the high cost of health care system-wide, not just in Medicare.
This year’s Trustees reports prove, once again, how successful and stable Social Security and Medicare continue to be for the American people and the federal government.”… Max Richtman, NCPSSM President/CEO
Here are some of the key points in the 2014 Trustees Report:
· Trustees project Social Security will be able to pay full benefits until the year 2033. After that, Social Security will still have sufficient revenue to pay 77% of benefits if no changes are made to the program.
· Social Security remains well-funded. In 2014, as the economy continues to improve, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2019.
· Trustees project a Cost of Living Adjustment increase of about 1.5% in 2015.
· The Trustees report there is now nearly $2.76 trillion in the Social Security Trust Fund, which is $32 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund’s assets.
With so little bad news to report in this 2014 Trustees report, critics have now shifted their attention to Social Security Disability Insurance (SSDI), which faces a more immediate challenge and requires Congress’ action for a reallocation.
· Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust Funds, as it has done 11 times before, to cover the anticipated shortfall. Disability expenditures have increased primarily due to demographic trends. When Congress took action in 1994 to address a shortfall in SSDI, it knew that it would have to take action again in 2015 or 2016. Unfortunately, some in Congress have politicized this anticipated shortfall and threatened to delay action in order to force cuts throughout the entire Social Security program.
On Medicare, the 2014 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.
· Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2030, four years later than the 2013 report. Health care spending has also grown much more slowly.
· Medicare Part B premiums are not projected to increase in 2015.