Lawmakers in Washington are consumed in bitter partisan battles over healthcare, tax, budget, and infrastructure policy, disputes that threaten to sever any remaining threads of bipartisanship. But when the Trustees of the Social Security and Medicare trust funds release their 2017 reports, expected this summer, the nation will be reminded that we face an even more consequential policy challenge: How to ensure that Social Security and Medicare will be able to provide reliable support to the millions of elderly and disabled Americans who are counting on benefits. Bipartisan cooperation and trust are essential to meeting this challenge.
The House Ways and Means subcommittee on Social Security has set a hearing for Friday July 14 on the status of the trust funds.
In their 2016 reports, the Trustees warned that the trust funds supporting disability, hospital and retirement/survivors benefits would be depleted in 2023, 2028, and 2035, respectively. The reports also outline the size of the benefit cuts that would occur if the trust funds are allowed to run out. Disability benefits would be cut by 11 percent, hospital insurance payments would be reduced by 13 percent and retirement/survivor's benefit reductions would be an unthinkable 21 percent. There is no reason to think that their 2017 reports will tell a fundamentally different story.
Delaying action until a crisis is imminent, which too often has been Congress's approach, would not only have adverse impacts on beneficiaries, it would severely restrict the remedies available to address the problem. Waiting to act could have devastating consequences.
Right now, if we maintained full benefits for those already eligible to receive them, it would require a 19 percent cut in benefits for all future beneficiaries to eliminate Social Security's financing shortfall in the absence of additional income. But if policymakers were to delay action until Social Security's trust funds are depleted, even eliminating payments entirely for newly eligible beneficiaries would not keep the trust funds solvent.