Social Security

Social Security Can Pay Full Benefits Through 2033

And that's if Congress and the White House does nothing to improve its longevity. This according to the CBPP and its response to an alarmist New York Times article.

Every four years, an independent panel of distinguished economists, demographers, and actuaries reviews the methodology and assumptions underlying the trustees’ report. The most recent panel, which issued its report in September 2011, found that the trustees’ projections for the next 50 years are, if anything, a bit too pessimistic. Adopting the panel’s recommended changes to the trustees’ assumptions would add a year of solvency to the Social Security trust funds.

Although Social Security can pay full benefits for two decades even if Congress does nothing to close the program’s long-term funding shortfall, prompt action would permit changes that are gradual rather than sudden, allowing people to plan their work, savings, and retirement with greater certainty. But policymakers and the public should not be panicked by false claims about Social Security’s finances.

Medicare, on the other hand, isn't as comparatively well off. But again, the solutions are simple: phase in Medicare tax hikes on wealthier earners, and gradually increase the income cap on the Social Security tax. Problem solved.

(via Ashby)

  • muselet

    Pundits, the Villagers and other Very Serious People—none of whom will ever need to rely on Social Security or Medicare—will keep howling that those programs (a) are going broke! and (b) will devour 1000% of the national economy in just a few years! And all too many in our political class—who, likewise, will never need them—will nod like bobbleheads and vote to cut those programs because it would be “fiscally irresponsible” not to do so (and, to amplify the cruelty, will loudly insist those cuts need to be made now now NOW because time’s a’wastin’ on this terrible crisis).

    Bob, I would add one thing that will be necessary to improve Medicare’s finances: reducing medical inflation. Unfortunately, an aging population makes that a daunting task (not impossible, but very difficult).