Social Security has 16 years left before benefit cuts begin, report says

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The hospital trust fund for Medicare, the federal health care program relied on by tens of millions of older Americans and many who are disabled, is expected to run out of money by 2026, three years earlier than expected, a new federal report said Tuesday.

Meanwhile, higher benefit payouts mean Social Security will have to dip into its almost $3 trillion trust fund for the first time since 1982 - and trustees warned the program would be insolvent by 2034.

While costs have exceeded net income since 2010, this is the first time in more than three decades that spending is expected to outweigh total income, by about $2 billion, meaning asset reserves will decline. However, certain long-term issues persist.

President Donald Trump says he won't cut Social Security or Medicare, but hasn't offered a rescue plan for the long run.

Unless lawmakers act, both programs face the prospect of being unable to cover the full cost of promised benefits.

"The Administration's economic agenda - tax cuts, regulatory reform, and improved trade agreements - will generate the long-term growth needed to help secure these programs and lead them to a more stable path". The U.S.is now closer to the insolvency of the Social Security than to the attacks of September 11.

The report says the other trust fund, which covers Medicare Parts B and D, is expected to be financed through the next 10 years and beyond.

"This report should eliminate any doubt that Trump's tax law yanked Medicare closer to insolvency", Senator Ron Wyden of OR, the top Democrat on the Finance Committee, said in a statement.

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

"Our estimate could change, because we still have several months of CPI data to go before the COLA is announced in October", Mary Johnson, The Senior Citizens League's Social Security policy analyst, said in a statement. Medicare is widely seen as a more hard problem that goes beyond the growing number of baby boomers retiring. The aging population has squeezed the program, pushing costs up and revenues down. At the end of 2017, the program had about 62 million beneficiaries.

Medicare costs will rise from last year's 3.7 percent of GDP to 5.8 percent by 2038.

Information for this article was contributed by Robert Pear of The New York Times, and by Ricardo Alonso-Zaldivar and Andrew Taylor of The Associated Press.

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