Reading the headlines from earlier this week, one would think that Social Security and Medicare were on their deathbeds. The latest flurry of misleading headlines came in response to the release of the 2018 Social Security and Medicare Trustees reports:
Entitlements are in crisis. Trump refuses to act – Washington Post
Medicare To Go Broke Three Years Earlier Than Expected, Trustees Say – Politico
Social Security and Medicare head toward the skids – New York Daily News
Medicare Will be Dead in Eight Years – Salon
Trustees Predict That Social Security Will Be Insolvent In 16 Years – Forbes
The truth is that Social Security and Medicare are not in crisis, going broke, heading toward the skids, or facing insolvency. The Trustees reports indicated none of these things. They simply said that the combined Social Security retirement and disability trust fund will become depleted in 2034, after which the system can still pay 79% of benefits – if Congress takes no corrective action before then. That’s because Social Security is funded through workers’ payroll contributions, which still will be flowing in 16 years from now and beyond.
The trustees also reported that the Medicare Part A Trust fund (which covers hospital care) will become depleted in 2026, at which time the system could still cover 91% of Part A costs. But again, this outcome will only come to pass if Congress does nothing to prevent it. Meanwhile, Medicare payroll taxes and premium payments (for Medicare Parts B and D) will continue to provide the program with revenue.
To be clear, the potential depletion of these trust funds does not mean the two programs are ‘insolvent’ or ‘bankrupt.’ The shortfall in the Social Security trust fund is fixable by boosting the system’s revenue stream. Lifting the payroll tax wage cap (currently $128,400) would go a long way toward ensuring the system’s financial health by asking upper income Americans to pay their fair share. So would a modest increase in the payroll tax, spread out over a couple of decades. There is legislation pending on Capitol Hill to enact these solutions, but the GOP leadership in Congress will not consider them. Instead, conservatives favor cutting seniors’ earned benefits through higher retirement ages, stingier cost-of-living adjustments (COLAs), and means testing.
Ditto for Medicare. The political right is itching to raise the eligibility age, privatize the program, and slash benefits. Instead, Congress could enact modest and manageable measures to keep Medicare on a sound financial footing, including smart cost-saving measures and allowing the program to negotiate prescription drug prices with Big Pharma (which President Trump conspicuously omitted from his prescription drug proposals).
In fact, conservatives are creating a self-fulfilling prophecy by undermining Medicare – and are using the trustees report as an excuse to sabotage it further. As Jared Bernstein of the Center for Budget and Policy Priorities points out, the Trump administration and Congress weakened Medicare by repealing the Affordable Care Act’s individual mandate and passing $2 trillion in regressive tax cuts, among other actions.
It’s Speaker Paul Ryan and his allies who talk of Medicare and Social Security going “bankrupt” and “entitlement” programs needing “reform” (which is code for the right-wing trinity of privatizing, raising eligibility ages, and cutting benefits). When the mainstream media reflexively parrot this misleading language in their reporting, it makes benefit cuts seem inevitable. Media headlines and soundbites on the trustees reports rarely include the slightest suggestion that there are common sense revenue measures that legislators like Senator Bernie Sanders and Rep. John Larson propose.
It’s time for the media to re-evaluate the way it covers Social Security and Medicare’s finances. More reflective, responsible headline writing and reporting would certainly make the mainstream media less complicit in the conservative push to cut Americans’ hard-earned benefits.