Despite Decades of Warnings, Depletion of Social Security’s Trust Fund Is Getting Closer
The depletion dates for both Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund and Medicare’s Hospital Insurance (HI) Trust Fund have been well known for years, - and both deadlines are rapidly approaching. The annual reports from the Social Security and Medicare Trustees for 2025 anticipate that both OASI and HI will become depleted in 2033, just eight years from now. When that happens, benefits for the respective programs would face automatic cuts, unless lawmakers make reforms before then.
The Depletion Date for Social Security’s OASI Trust Fund Is Now Only Eight Years Away
In 1995, the trustees projected that the OASI Trust Fund would become depleted 36 years later, in 2031. Three decades later, the projected date of depletion remains similar. It is important to shore up the trust fund because when the balance is depleted the program will be limited to paying only the benefits equal to incoming revenues, and that will mean a sudden and significant cut for beneficiaries. Lawmakers have had plenty of time to shore up the OASI Trust Fund, and need to act soon to put this critical program on a sustainable path — rather than allowing an automatic cut of 23 percent to benefit payments in 2033.
The Medicare HI Trust Fund Depletion Date Is in Just 12 Years
The latest projection from the Medicare Trustees shows that the HI Trust Fund will also be depleted just eight years from now, in 2033. As the depletion date approaches now is the time for lawmakers to address Medicare’s financial shortfall to avoid cuts in payments to providers of Medicare services, which could lead to reduced or eliminated services for elderly Americans.
The HI Trust Fund's depletion date fluctuates more than the OASI Trust Fund because healthcare utilization and spending changes are hard to predict and lead to greater volatility than seen in the fund for Social Security.
Conclusion
Social Security and Medicare are irreplaceable cornerstones of our society, and lawmakers should work together on bipartisan solutions that are comprehensive, phased in, and fair. Many solutions are available — including a combination of revenue increases and benefit adjustments — that would protect the most vulnerable and provide certainty to all beneficiaries. Lawmakers should feel a renewed urgency to ensure that the largest government programs can continue to adequately support the country’s growing elderly population as part of a sustainable budget outlook.
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Further Reading
Social Security Faces Serious Financial Shortfalls and Other Takeaways From the Trustees Report
Without reform, the Social Security Trust Funds will soon be depleted and unable to pay full benefits.
Social Security and Medicare Trust Funds Could Be Depleted Within the Next Decade
Today, the Social Security and Medicare Trustees released their annual reports on the programs’ financing, showing that the future of these vital programs remain at risk.
A Bipartisan Roadmap for Social Security Reform
Lawmakers are running out of time before automatic reductions to benefits are activated; the Brookings Institution plan is a valuable contribution to the policy discussion.