No doubt you’ve already seen the screaming headlines promising the immediate bankruptcy of Social Security and Medicare…it’s an annual Washington tradition tied to the release of the Social Security and Medicare Trustees report. Unfortunately, this tradition seldom stems from factual reporting of what’s actually in the trustees report. This year is no exception.To help you sort fact from fiction about the true health of Social Security and Medicare, here is our President/CEO Max Richtman’s reaction to the Trustees’ projections and some data you likely won’t see reported in this week’s news coverage:
?Projections in the 2012 Trustees Reports come as no surprise to anyone who understands how Social Security and Medicare work. The trust fund solvency date for Social Security has seen fluctuations many times in recent decades, from a depletion date as distant as 2048 in the 1988 report to as soon as 2029 in the 1994 and 1997 reports. This year?s report is well within that range. Contrary to the crisis myths perpetuated by fiscal conservatives and many in the media, the prevailing facts show once again that Social Security remains among the nation?s most successful and stable programs. The Trustees report there is now $2.7 trillion in the Social Security trust fund, which is $69 billion more than last year, and continues to grow. Payroll contributions and interest will fully cover benefits for decades to come.? Max Richtman, NCPSSM President/CEO
In the 2012 Trustees report:
- Trustees project Social Security will be able to pay full benefits until the year 2033. After that, Social Security will have sufficient revenue to pay about 75% of benefits.
- Social Security is still well funded. In 2012, with the economy showing slow signs of recovery, Social Security?s total income still exceeded its expenses by over $57 billion. In fact, the Trustees estimate that total annual income is expected to exceed program obligations until 2020.
- Beneficiaries will likely see a Cost of Living Allowance increase of 1.8% in 2013.
The 2012 Trustees report also shows Medicare?s Trust Fund solvency projection remains unchanged at 2024. This reflects the success that health care reform has had in improving Medicare?s solvency. If long-term solvency for Medicare is truly Congress? goal, then repealing health care reform is not an option as it would set back that progress immeasurably.
?The challenges facing Medicare are the same that we see in the broader health care system?the high cost of health care in America. Thanks to health care reform, Medicare will save $200 billion by 2016, but even those savings would be lost if opponents have their way and the Affordable Care Act is repealed. We must allow reform to be fully implemented in order to realize the projected savings.? Max Richtman
The National Committee believes that Congress can also improve the long-term outlook for Social Security with modest and manageable changes in revenue without enacting harmful benefit cuts for current or future retirees. Recent polling has shown that a majority of Americans support lifting the payroll tax cap to ensure Americans contribute at all income levels.