May 8, 2024

Despite Decades of Warnings, the Depletion of Social Security’s Trust Fund Has Been Getting Closer

The depletion date for Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund has been relatively well known for the past several years and is now rapidly approaching. In addition, Medicare’s Hospital Insurance (HI) Trust Fund could be depleted in a little over a decade. Each year, the Social Security and Medicare Trustees project the dates at which the two funds will become depleted. The latest reports project that OASI will become depleted in 2033 and HI in 2036. At those points, 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 Nine Years Away

In 1994, the trustees projected that the OASI Trust Fund would become depleted 42 years later, in 2036. A year after, in 1995, the program’s outlook deteriorated, pushing the projected depletion date up to 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 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 now need to act soon to put such a critical program on a sustainable path — rather than allowing an automatic cut of 21 percent to benefit payments in 2033.

The Social Security trustees have warned about the forthcoming depletion of the OASI Trust Fund for some time


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 become depleted just 12 years from now, in 2036. While that projected depletion date is an improvement from previous reports, the trust fund is still on an unsustainable trajectory. 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 Medicare trustees continue to note that the HI Trust Fund is nearing depletion

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. 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.

Related: Five Charts about the Future of Social Security and Medicare

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