Social Security is still fully funded for nearly two decades, a COLA increase unlikely, and health care reform continues to preserve Medicare’s solvency
“No doubt, today’s unsurprising news in the Trustees Reports for Social Security and Medicare will be overshadowed by the same crisis calls we hear each and every year from those determined to cut benefits or privatize the programs. Today’s reports lay out in clear terms how stable Social Security and Medicare remain. Rather than use the disability program’s projected shortfall as a political opportunity to target the entire Social Security program for cuts, Congress can pass a simple reallocation, as has happened without controversy 11 previous times. Or, even better, Congress could pass new legislation, introduced today by Rep. Xavier Becerra, to combine the Social Security Trust Funds. There are ways to avoid a massive benefit cut Americans with disabilities simply cannot afford without targeting the entire Social Security program for cuts.”… Max Richtman, NCPSSM President/CEO
Here are some of the key points in the 2015 Trustees Report:
· Trustees project Social Security will be able to pay full benefits until the year 2034, one year longer than projected last year. After that, Social Security will still have sufficient revenue to pay 79% of benefits if no changes are made to the program.
· Social Security remains well-funded. In 2015, 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 no Cost of Living Adjustment increase.
· The Trustees report there is now nearly $2.79 trillion in the Social Security Trust Fund, which is $25 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 2015 Trustees report, critics have now shifted their attention to Social Security Disability Insurance (SSDI), which faces a more immediate challenge and requires Congress’ action.
· 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 pass legislation that combines the Social Security Trust Funds or at the very least, reallocates 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 2015 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, the same as predicted in the 2014 report and 13 years later than was projected in the last report issued prior to passage of the Affordable Care Act.
· HHS Secretary Sylvia Burwell reports Medicare Part B premiums are not projected to increase for about 70% of beneficiaries in 2016.