WASHINGTON, May 6, 2024
/PRNewswire/ -- With today's release of the annual Social Security
and Medicare Trustees' Reports confirming that both programs are
facing near-term insolvency, The Concord Coalition called for
dedicated 2024 candidate debates on how to deal with this urgent
problem.
"Debates are a valuable opportunity for voters to hear and
assess the candidates' ideas on how to address the nation's major
challenges. While many such challenges exist, the future of Social
Security and Medicare deserves special focus because the retirement
security and healthcare for millions of Americans would be severely
damaged by a failure to act. Moreover, because of their size and
projected growth, the future of these programs also affects the
allocation of federal budgetary resources, the appropriate level of
taxation, and the long-term growth of the economy," said Concord
Coalition Executive Director Bob
Bixby.
The Social Security and Medicare trustees warn that absent
corrective actions, the finances of these two critically important
programs will rapidly deteriorate. Both programs are already
running annual cash shortfalls, which increase pressures on the
overall federal budget.
The combined Social Security trust funds (OASDI) are facing
insolvency by 2035. Doing nothing would result in an across the
board benefit cut of 17 percent. Medicare Part A is facing
trust fund insolvency by 2036. Doing nothing would require a 11
percent cut in provider payments jeopardizing access to healthcare
services.
To illustrate the magnitude of the Social Security challenge,
the trustees estimate that one of three things must happen to keep
the program solvent over the next 75 years: (1) dedicated revenues
would have to increase by an amount equal to an immediate and
permanent payroll tax increase of 3.33 percentage points — from
12.4 percent to 15.73 percent, a (2) scheduled benefits would have
to be immediately and permanently reduced for all current and
future beneficiaries by 20.8 percent, or (3) a combination of the
two.
The trustees further note that, "If actions are deferred for
several years, the changes necessary to maintain Social Security
solvency through 2098 become concentrated on fewer years and fewer
generations."
"The trustees' warnings are all the more alarming because the
nation is not in a position of current or projected fiscal
strength. Sudden and substantial benefit cuts await beneficiaries
in 12 years or less — well within the lifetimes of many current
beneficiaries — if lawmakers fail to act. Solutions must be found
that are fiscally and generationally responsible," Bixby added.
As a budgetary matter, it is important to note that Social
Security and Medicare do not "pay for themselves." The trustees'
reports confirm that Social Security and Medicare Part A will
experience growing cash deficits in the future as they pay out more
than they receive from their dedicated resources.
General federal revenues also support Medicare Part B, which
provides various medical services, and Medicare Part D, which helps
pay for prescription drugs. By design, the premiums that older
Americans pay for these elements of Medicare cover only about 25
percent of their costs. According to the trustees' report, Social
Security and Medicare had a net draw on the budget of $534 billion in 2023. This consisted of
$88 billion for Social Security and
$446 billion for Medicare.
"If none of this matters to the people who seek federal office
in 2024, the time to find out about it is now when voters can
assess the candidates' positions and make informed judgments.
Debates in the House, Senate, and presidential campaigns would shed
light on whether the candidates have a firm understanding of the
challenges facing Social Security and Medicare and whether their
campaign promises add up. Voters should not have to wait until
January of 2025 to find out whether candidates endorse the Do
Nothing Plan," Bixby said.
The Concord Coalition is a nonpartisan, grassroots organization
dedicated to fiscal responsibility. Since 1992, Concord has worked
to educate the public about the causes and consequences of the
federal deficit and debt, and to develop realistic solutions for
sustainable budgets. For more fiscal news and analysis, visit
concordcoalition.org and follow us on Facebook
@ConcordCoalition and on Twitter/X: @ConcordC
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SOURCE Concord Coalition