Social Security to tap reserves to cover 2018 benefits

Social Security to tap reserves to cover 2018 benefits

Medicare and Social Security are running out of money more quickly than expected, officials said Tuesday.

Meanwhile, higher benefit payouts mean Social Security will have to dip into its almost $3 trillion trust fund for the first time since 1982 - and trustees warned the program would be insolvent by 2034.

The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the USA government to dip into the retirement system's trust fund to pay benefits to participants.

The country's main welfare program for retirees, Social Security, also faces an uncertain future. Medicare trustees say the trust fund that covers Medicare Part A, which pays for hospital stays, home health services, nursing homes and hospice care, will run out of money sooner than expected. It's also the unpredictability of health care costs, which can be jolted by high-priced breakthrough cures, and which regularly outpace the overall rate of economic growth. Medicare Part B, which covers outpatient visits, and Part D, which pays for most prescription drugs, are paid for in part by general revenue and by individuals' premiums. That's the amount the Social Security's trustees said tax income alone could cover. None of those top officials was present today; an aide cited scheduling conflicts. The public trustees are usually more candid, but those posts remain unfilled. A 2015 budget agreement extended the solvency of the Social Security Disability Insurance trust fund by temporarily allocating a larger share of the payroll tax to fund the disability program, which was in danger of imminent depletion.

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The trustees report is considered an annual wake-up call for the beleaguered programs, though consensus around ways to secure their future remains elusive.

Rather than cutting benefits, the Democratic-leaning Social Security Works coalition supports expanding benefits as a solution to the nation's looming retirement crisis by asking the wealthy to contribute more.

But federal deficits keep rising, and the recent Republican tax-cut bill is only expected to add to the debt.

Higher deficits would leave less maneuvering room for policymakers when the day of reckoning finally arrives for Social Security and Medicare. Advocates for the elderly said today there should be no cuts to Social Security benefits.

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