Strong Labor Market Steadied Social Security and Medicare Funds
The financial health of Social Security and Medicare, two of the nation’s most crucial safety net programs, improved this year as a stronger-than-expected economy attracted more workers to the labor market. But the overall financial outlook of the popular programs remained grim.
Annual reports released on Monday by trustees of the old-age and retirement programs showed that both still faced long-term shortfalls that could ultimately result in reduced retirement and medical benefits. The reports showed that the Social Security and disability insurance programs, if combined, would not have enough money to pay all of their obligations in 2035. Medicare will be unable to pay all its medical claims starting in 2036.
About 70 million people receive Social Security benefits, and more than 66 million participate in Medicare.
The fate of the popular programs continues to be a contentious political issue, one that is expected to intensify as the November presidential election draws near.
President Biden has pledged to block any cuts to Social Security and Medicare and has called for shoring up the programs with higher taxes on the rich. Former President Donald J. Trump, the presumptive Republican nominee, suggested this year that he was open to scaling back the programs when he said there was “a lot you can do in terms of entitlements in terms of cutting.” He later walked back those comments and pledged to protect the programs.
In a statement on Monday, Mr. Biden highlighted Republican proposals that would cut Social Security funding and raise the retirement age to qualify for benefits. He promised that he would be a bulwark against such policies.