Published in RINewsToday on May 13, 2024

By Herb Weiss

The recently released 2024 Social Security and Medicare Trustees report shows an improved outlook for these programs. This year’s projections show that Social Security can pay its benefits and cover administrative costs now until 2035, one year longer than projected in last year’s report. But, after that, it can only cover 83 percent of benefits, even if Congress fails to take no action to fix the program to ensure its financial viability.  

Medicare’s fiscal health improves even more, says the Medicare Trustees Report. It projects that the program’s Part A (Hospital) fund will be able to pay 100% of scheduled benefits until 2036 — a full five years later than estimated by the trustees last year. 

Under the Social Security Act of 1935, the Board of Trustees is required to submit the annual reports on the current and projected financial status of the trust funds to Congress on April 1 each year. 

It’s Time for Congress to Protect Social Security

“This year’s report is a measure of good news,” says Martin O’Malley, Commissioner of Social Security, in a statement recognizing the impact of “strong economic that have yielded impressive wage growth, historic job creation and a steady, low unemployment rate.”  

“So long as Americans across our country continue to work, Social Security can — and will — continue to pay benefits,” says O’Malley, calling on Congress to take action to ensure the financial viability of the Trust Fund “into the foreseeable future just as it did I the past on a bipartisan basis.”  

“I will continue to urge Congress to protect and support Social Security and restore the growth of the funds. Whether Congress chooses to eliminate the shortfall by increasing revenue, reducing benefits, or some combination, is a matter of political preference, not affordability,” observes O’Malley, noting that there are several legislative proposals that address the shortfall without benefit cuts — it should debate and vote on these and any other proposals. 

Social Security Advocacy Groups. Key GOP Lawmaker Issue Statements 

With the May 6 release of the 2024 Social Security and Medicare Trustees report, statements were generated by Social Security advocacy groups and Congressional lawmakers to give their take on the projections. 

Even with the report pushing back the expected depletion dates for Social Security and Medicare, Max Richtman, President & CEO, National Committee to Preserve Social Security & Medicare (NCPSSM) called for Congress to immediately act to strengthen the Social Security program for the 67 million beneficiaries. “We cannot afford to wait to take action until the trust fund is mere months from insolvency, as Congress did in 1983.  The sooner Congress acts, the less painful the remedies will be, says Richtman.

In responding to comments that Social Security is going ‘bankrupt, Richtman says: “Revenue always will flow into Social Security from workers’ payroll contributions, so the program will never be ‘broke.’ But no one wants seniors to suffer an automatic 17% benefit cut in 2035, so Congress must act deliberately, but not recklessly.  A bad deal driven by cuts to earned benefits could be worse than no deal at all.” 

Richtman warns that seniors will take a devastating financial hit if Congress is forced to make cuts in 2035. “Average Social Security benefits are already very modest — about $23,000 per year, which is only $3,000 higher than the federal poverty line for a household of two,” he says, noting that wealthier beneficiaries can afford to contribute more to the program without hurting them financially. 

“Social Security has an accumulated surplus of $2.79 trillion. It is 90 percent funded for the next quarter century, 83 percent for the next half century, and 81 percent for the next three quarters of a century. At the end of the century, in 2100,” says Nancy Altman, President of Social Security Works, noting that the program is projected to cost just 6.1 percent of gross domestic product (“GDP”). 

Like the SSA Commissioner and NCPSSM’s Richtman, and Altman urges Congress to act sooner rather than later to ensure that Social Security can pay full benefits for generations to come, along with expanding Social Security’s modest benefits. “That will restore one of the most important benefits Social Security is intended to provide to the American people — a sense of security,” she says.

As to Medicare, the released report notes the life expectancy for Medicare part A Trust Fund is extended another five years. 

“It’s great news that the Part A trust fund has an additional FIVE years before it becomes depleted, partly because of the unexpected strength of the U.S. economy.  But current and future seniors expect action to keep the trust fund solvent for the long-term,” said Richtman.

“We support President Biden’s plan to strengthen Medicare’s finances, as laid out in his FY 2024 and 2025 budgets,” says Richtman, noting that the president’s plan would bring more revenue into the program, rather than cutting benefits as some Republicans have proposed.  “Building on the prescription drug pricing reforms in the Inflation Reduction Act, the President’s budget proposal would lower Medicare’s costs — and some of those savings would be used to extend the solvency of the Part A trust fund,” he says.

According to Richtman, beyond trust fund solvency, the Trustees reported that the standard Medicare Part B premium will rise next year to $185 per month – a $20 or 6 percent monthly increase. “Any premium increase is a burden to seniors living on fixed incomes, who too often must choose between paying monthly bills or filling prescriptions and getting proper health care.  Seniors need relief from rising premiums and skyrocketing out-of-pocket health care costs. Fortunately, the Biden administration is taking steps to reduce those costs,” said Richtman.

Key GOP Chair  Responds to Trustee Reports

Chairman Jodey Arrington (R-TX), of the House Budget Committee, quickly released a statement, responding to the release of the 2024 Social Security and Medicare Trustees report.

According to Arrington, the House Budget Committee’s Fiscal Year (FY) 2025 Budget, while not making any changes to Social Security or Medicare benefits, provides a way to prod Congress and the President to address the fiscal insolvency of these programs. The Budget Committee has also reported the Fiscal Commission Act, which will also give Congress the tools it needs to save and strengthen these vital programs,” he noted.

“We have the highest levels of indebtedness in our nation’s history, an inflationary and anemic economy, and the two most important senior safety net programs facing insolvency, says Arrington, noting that this year’s trustees report “only reiterates why we need a bipartisan Fiscal Commission to address the Social Security and Medicare Trust Funds and the $140 trillion unfunded liability on America’s balance sheet.”

“Republicans and Democrats have both proven they will not fix Social Security and Medicare on their own. We must put our seniors and country first and work together to find a solution,” he charges. “Doing nothing is condemning our seniors to automatic benefit cuts and our country to a future debt crisis,” he says.

Fixing Social Security…A Difference in Perspective.

Both NCPSSM and Social Security Works strongly endorse financially shoring up Social Security by bringing in more money into the trust fund by increasing the payroll wage-cap to require higher-income beneficiaries to pay a higher Social Security payroll tax.  Both Social Security advocacy groups endorse Rep. John Larson’s (D-CT) Social Security 2100 Act, a legislative proposal would maintain the current payroll wage cap (currently set at $168,600), but subjecting wages $400,000 and above to payroll taxes, as well — and dedicating some of high-earners’ investment income to Social Security. 

On the other hand, Republican lawmakers call for cutting earned benefits of younger workers by raising the full-retirement age, means-testing, and replacing the exiting COLA (CPI-W with the Chained CPI-U) that would result in a lower COLA over time. Also, no COLA’s would be provided to high income earners.  

Social Security is considered the third rail a nation’s politics.  Political pundits say that contact with the rail is like touching this high-voltage rail that can result in “political suicide.”  That is why the GOP-controlled House Budget Committee has proposed to create a fiscal commission to give lawmakers political cover to enact the cuts without having to vote on the record.  

Over two months ago, the most recent budget hammered out by the Republican Study Committee, endorsed by 80 percent of the House Republicans, calls for over $1.5 trillion in cuts to Social Security in just the next ten years., including an increase in the retirement age to 69 and cutting disability benefits Medicare costs for seniors by taking away Medicare’s authority to negotiate drug costs, repealing a $ 35 insulin, and $ 2,000 out-of-pocket cap in the Inflation Reduction Act. 

 Additionally, the House GOP budget transitions Medicare to a premium support system that the Congressional Budget Office has found would raises premiums for many seniors.  Finally, it calls for cuts in Medicaid, the Affordable Care Act, and the Children’s Health Insurance Program by $ 4.5 trillion over ten years, taking health care  coverage away from millions of people. 

While President Donald Trump, the GOP’s presidential candidate, has previous said he wouldn’t make cuts to Social Security, recent interviews reveal a change.  According to a March 11, 2024 web posting by CNN’s Kate Sullivan and Tami Luhby, former President Donald Trump, the Republican candidate for president, “suggested[ in a CNBC interview] he was open to making cuts to Social Security and Medicare after opposing touching the entitlement programs and attacking his GOP presidential primary rivals over the issue.”

At the Polls

Legislative proposals to fix the ailing Social Security and Medicare programs are different as night and day. Rather than to  continue to debate the fine points, let’s put the differing policies on the ballot. With just 177 days left before the upcoming November presidential election, Congress must vote on Democratic and Republican legislative proposals, detailing differing provisions as to how these programs can increase the financial stability of these programs. Larson has already thrown his legislative proposal into the hopper, but it won’t see the light of day with a GOP controlled House.    

Last year, 66 million Americans received Social Security benefits.  This year’s Trustee’s report must send a clear message to these beneficiaries that how Congress acts during the next decade will either make or break the Social Security program. 

So, now House Speaker Mike Johnson, (R-La) and Senate President Charles E. Schumer (D- NY) must allow a vote on both Republican and Democratic legislative proposals in their respective chambers.  Let Senate and House lawmakers go on the record and publicly be tied to a vote as to which legislative political strategy they endorse to financially shore up Social Security and Medicare.  Of course, this can give voters a score card. And if this political issue is as important to them as the economy, abortion, and immigration, they can decide at the ballot box who they should bring back to Capitol Hill. 

That’s the American way to do it.