2034 is a pivotal year for Social Security

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

The combined Social Security trust funds are slated to run dry in 2034, and that will force benefits to be cut more than 20 percent.

The main trust fund behind Medicare, the USA health-care program for the elderly and disabled, will be exhausted in 2026, three years earlier than was projected a year ago, the government said Tuesday.

For the first time since 1982, Social Security has to dip into the trust fund to pay for the program this year. Because of the deterioration in Medicare's finances, officials said the Trump administration will be required by law to send Congress a plan next year to address the problems, after the president's budget is submitted. Trustees for the retirement and disability program revealed on Tuesday that Social Security will no longer be able to meet its obligations to beneficiaries starting in in 2034, or 16 years from now - which is less time than has elapsed since terrorists slammed airplanes into the World Trade Center and the Pentagon in 2001.

Of the two programs, Medicare faces the greatest fiscal challenges as medical costs increase and the U.S. ages, with many baby boomers set to retire in the next several years.

Excluding federal debt payments, Medicare and Social Security together make up about 40 percent of total USA government spending.




Social Security covers 62 million people, split among retired workers and their dependents, survivors of workers who've died and disabled people.

Democrats want to expand the safety net by spending more on health care and education.

Social Security recipients are likely to see a cost of living increase of about 2.4 percent next year, working out to roughly $31 a month, government experts said.

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

The twin warnings come as Congress has cut revenue and boosted spending - moves that, analysts say, will leave the government's finances struggling for years to come.

Higher deficits mean 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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