Yes, Social Security and Medicare are under threat

Insurance, Health-Care

Get ready for cuts or tax hikes

Insurance, Health-Care

16.2.2020

OPINION: Yes, Social Security and Medicare are under threat. The trust funds will run out soon, and many people depend on these benefits to survive.

Get ready for cuts or tax hikes

If you’re actually hoping to retire at any point, the chances are you’re going to need Social Security, Medicare, and Medicaid. So as the president unveils his latest budget proposals, amid a chorus of partisan claims and counterclaims, here are the numbers that should matter most to you and your family. These proposed cuts to Medicaid spending? The proposed cuts to the Environmental Protection Agency, or Food Stamps? They’re not even the half of it. Much deeper cuts are looming — for your Social Security and your Medicare benefits. The president himself recently hinted as much, when he agreed on TV that “reforming” these entitlement programs, the standard euphemism for cutting them, was going to be on the table. And unfortunately Trump’s 2017 tax cuts have made the situation worse. Measurably. Those tax cuts will either have to be reversed dramatically, or you should expect your entitlements will have to be slashed. Read: This word describes Social Security — but not everyone wants to hear it Don’t believe me? Check out the math. Numbers, unlike people, don’t lie. The trustees of Social Security say the program’s trust fund is expected to run out of money in 2035. The trustees for Medicare say their situation is even worse: The program is due to hit the financial wall in just six years’ time, in 2026. Read: Democrats and Republicans agree on this: Social Security and Medicare need help — and soon Some 64 million Americans rely on Social Security, and that is forecast to rise to 74 million by 2030. The average benefit is just $1,431. And, not to belabor the obvious, most retirees simply cannot survive without the programs. Yet according to the Congressional Research Service, the independent body that advises Congress and the Senate, under the current law Social Security will have to slash benefits by 20% in 2035. That’s the equivalent of a cut of nearly $300 to the average monthly payment. The alternative, says the CRS, is to hike “FICA,” or payroll taxes, by an astonishing 26%. OK, so maybe there’s a third solution. Maybe Uncle Sam can just borrow all the extra money. Indefinitely. Alas, we’re already borrowing with both hands. The CBO currently predicts that the national debt by 2035 will be around $42 trillion, or about two and a half times the figure today. That’s even before trying to borrow a nickel to prop up Social Security. This is the essential background for talking about Trump’s tax cuts. They are already on track to add nearly a $1 trillion to the deficit in just a few years. These are the White House’s own numbers. Federal revenues for the period 2018 to 2022 will be $18.4 trillion, according to the latest White House budget data. That’s $840 billion less than was forecast for the same period by the independent Congressional Budget Office in the summer of 2017, shortly before the tax cuts were passed by the Republican-controlled Congress. And, yes, these numbers already factor in any growth resulting from Trump’s policies so far, and his administration’s very optimistic forecasts for the years ahead. Let’s also remember that president Trump has unveiled sweeping spending cuts in his latest budget proposal to help restrain the ballooning deficit. If the federal budget were in balance, and Social Security and Medicare weren’t hurtling toward crisis, the loss in federal revenue might not matter. It would be largely a political debate, about whether you prefer “bigger” or “smaller” government, or more or fewer public services. Unfortunately, we don’t have that luxury. Most Americans are relying on a gigantic insurance operation that is in financial crisis. The situation needs to be made dramatically better. Instead it’s being made even worse. That $840 billion cost is equal to almost 30% of the entire assets of the Social Security trust fund. The administration says the fiscal costs will lessen further out. Maybe. This depends on heroic predictions about how much the economy will grow in the future, too. If the economy grows more slowly — in line with modern trends — the picture will continue to get worse. Meanwhile, for anyone who has any dream of retiring, this is the context that should dominate the talk about the budget and taxes. More from MarketWatch Retirement Brett Arends Brett Arends is a MarketWatch personal finance writer. Follow him on Twitter @BrettArends. We Want to Hear from You Join the conversation Comment #div-gpt-ad-1569967089584-0 >div >iframe { width: 100% !important; min-width: 300px; max-width: 800px; } Related Topics Read more: MarketWatch

The government pays 1.5% on your 40 years investment, Bonds and the Stock market pays 2 - 4 time that, why would you want the government involved to reduced your possibilities? You have an opinion because you have a mouth but NOT the experience or know-how. also, you say numbers don't lie, but your numbers aren't real. they are estimates about future spending and revenue. they may be really good estimates, but ultimately, they are not facts and nothing more than advanced projections subject to an infinite number of variables

this is why i wish i could opt out of social security. I would rather plan for my own retirement and keep that money in my pocket. They are under threat from their own weight. As usual, MW ignores the truth. Tax receipts are up since the tax cuts; the dems refuse to cut spending In other words, Buy Bitcoin

Maybe they should start giving the money away to obese people who are under 62. Fare point, but the problem is t because of Trump, politicians have been kicking this down the road for decades Join our telegram community for FREE - Signals - Analysis - Education - Trading Tools - News & much more Get instant access at forex forexsignals

STOP. Both programs need reforms to be viable long-term. It’s something that should have strong bipartisan focus. Would be nice to see politicians focused on fixing these programs rather than just using them as a campaigning and fundraising tool.

Bloomberg unveils plans for Americans' Social Security, retirement savingsFormer New York City and billionaire businessman Mike Bloomberg has released plans to help shore up Social Security and increase retirement savings as part of his bid for the White House. Here's how his proposals aim to boost workers' bottom lines. Throw the seniors against a wall until they don't complain? Didn’t he drop $18M on advertising and didn’t even bother to stop in Iowa? flyoverstates

What? mehn I hope this is not true cause alot of re-strategizing should be going on to create an alternative solution to this. Many people depend on it. 😀 Not to mention the fact that some of us paid a small fortune toward it for decades.....

Yes Running Dates Are a Thing—Here’s How They Can Go Horribly WrongYou might find yourself flat on your face, dropping someone, being dropped, or that the person doesn’t even actually run. (The horror. 😱)

Yes, You Should Actually Start an Emergency Fund This YearAnd this is how to put money in it. .

Hello, Yes, I’m Very Thirsty for Robert Pattinson as BatmanThe world just got its first look at Robert Pattinson as Batman, and the footage is, shall we say, hot. Whata jaw.. Cool, fun article. I like Emma Baty! I'm not. I hope he does it Justice...JusticeLeague 😔🦇

Here's how to send your loved ones Google Doodle's Valentine's Day gifs on social mediaThe six gifs feature two aliens in love with messages like 'love you to the moon and back' and 'you're out of this world.'

Mike Bloomberg Campaign is Paying Social Media Influencers to Post Political Memes OnlineThe Bloomberg campaign is using the Tribe app to hire social media influencers to post political memes, PEOPLE confirms So what?



Tornado flattens buildings in Jonesboro, Arkansas

Biden consolidates support, but trails badly in enthusiasm: Poll

First Live Concert Post Coronavirus Poll: Vote

First death of infant in connection with coronavirus reported in the US

Yes, we long have referred to disease outbreaks by geographic places. Here's why we shouldn't anymore

Krispy Kreme is giving out a free dozen doughnuts to healthcare workers

China reports smaller number of new daily coronavirus cases

Write Comment

Thank you for your comment.
Please try again later.

Latest News

News

16 February 2020, Sunday News

Previous news

Republicans and Democrats, your political leanings color your investments

Next news

Affordable Dupes For Laura Mercier’s Legendary Translucent Setting Powder
Modi apologizes to India's poor as lockdown criticism mounts China says imported virus cases raise risk of new infection wave China says imported virus cases raise risk of new infection wave Coronavirus crisis puts EU's credibility on the line: French minister WHO says following Taiwan virus response closely, after complaints Australian PM urges public gatherings should not exceed two people Modi apologises to India's poor as lockdown criticism mounts Johnny Depp Allowed to Pursue Defamation Suit Against Amber Heard China says imported virus cases raise risk of new infection wave Swiss govt says 257 dead from coronavirus, 14,336 tested positive Tokyo confirms 68 new coronavirus cases, record daily increase: NHK Coronavirus Wage Cuts Could Cost Messi And Ronaldo $20 Million—And They’d Still Be The World’s Highest-Paid Soccer Players
Tornado flattens buildings in Jonesboro, Arkansas Biden consolidates support, but trails badly in enthusiasm: Poll First Live Concert Post Coronavirus Poll: Vote First death of infant in connection with coronavirus reported in the US Yes, we long have referred to disease outbreaks by geographic places. Here's why we shouldn't anymore Krispy Kreme is giving out a free dozen doughnuts to healthcare workers China reports smaller number of new daily coronavirus cases A 102-year-old Italian woman recovers from coronavirus Perspective | Simple DIY masks could help flatten the curve. We should all wear them in public. Local Leaders Are Showing the Way Forward Exodus of Workers Reveals the Limits of India’s Coronavirus Lockdown At home with coronavirus, Johnson writes to the nation