Today's News: Social Security and Medicare Trust Fund Face Worsening Outlook

If Congress fails to act, automatic benefit cuts of around 19–23% would be triggered. Medicare’s hospital insurance fund also faces earlier insolvency, now expected in 2033.

Photo: MargJohnsonVA/iStockphoto

Overview

• Date: June 17-18, 2025

• Topic: Social Security and Medicare Trust Fund Depletion Forecasts

• Summary: The 2025 trustees’ reports reveal worsening financial outlooks for both Social Security and Medicare. The Social Security Old-Age and Survivors Insurance Trust Fund is now projected to be depleted by 2033 or 2034, depending on assumptions. If Congress fails to act, automatic benefit cuts of around 19–23% would be triggered. Medicare’s hospital insurance fund also faces earlier insolvency, now expected in 2033. The primary drivers include demographic changes, slowed wage growth, increased benefits from recent legislation, and rising healthcare costs. Despite political pledges to protect the programs, no legislative solutions have been proposed.

Sources

• The New York Times – Social Security’s Finances Erode Further and Could Spell Benefit Cuts

• CNN – Social Security won’t be able to pay full benefits in 2034 if Congress doesn’t act

• Fox Business – New analysis projects Social Security's COLA for 2026 will be higher than previous estimates

• The Washington Post – Social Security fund could run dry ahead of earlier forecast, trustees say

• The Wall Street Journal – Social Security’s Potential Insolvency Date Moves Up One Year

Key Points

• Depletion Date: Social Security retirement trust fund expected to be depleted by 2033–2034; Medicare hospital fund by 2033.

• Benefit Cuts: Without action, retirees may face Social Security cuts of 19% (The Wall Street Journal) to 23% (The New York Times, The Washington Post); Medicare may see an 11% cut (The Washington Post).

• Demographic Drivers: Declining fertility, slower wage growth, and aging population reduce payroll tax revenue.

• Legislative Impact: The bipartisan Social Security Fairness Act increased benefits for ~3 million workers, accelerating insolvency.

• Medicare Outlook: Higher hospital spending in 2024 prompted Medicare insolvency date to move up three years.

• Calls for Action: Trustees and advocacy groups urge early legislative fixes to allow gradual reform; options include raising taxes, adjusting retirement age, or reducing benefits growth.

• Political Inaction: Despite urgency, no proposals have been introduced; political leaders vow not to cut benefits but offer no revenue plans.

Unique Highlights

• The New York Times: Critiques DOGE's cuts under Elon Musk, noting negligible savings and significant disruption. Highlights 0.3% improper payment rate as evidence of program efficiency.

• CNN: Quotes Cato Institute criticizing benefit increases as "political giveaways" that worsen solvency. Details potential premium hike in Medicare Part B to $206.50 by 2026.

• Fox Business: Focuses on projected 2.5% COLA for 2026 based on inflation. Warns that weakened CPI data due to BLS hiring freeze could understate inflation and hurt seniors.

• The Washington Post: Provides detailed breakdown of funding mechanics and contributor demographics. Notes early retirements due to political fears and DOGE-driven SSA cuts.

• The Wall Street Journal: Emphasizes bipartisan responsibility and notes Trump’s proposal to eliminate taxes on Social Security benefits. Also highlights projected GDP burden of 6% by 2035.

Contrasting Details

• Depletion Year Estimates:

  • The New York Times, The Washington Post: 2033

  • CNN, The Wall Street Journal: 2034

  • CNN distinguishes between combined and individual trust funds, noting 2033 for retirement-only, 2034 when combined.

• Projected Benefit Cuts:

  • The New York Times and The Washington Post: 23%

  • The Wall Street Journal: 19%

• COLA and Inflation Impact:

  • Only Fox Business details 2026 COLA projections and concerns over BLS data accuracy.

• Attribution of Blame:

  • The New York Times and The Washington Post spotlight the impact of Trump administration and DOGE’s actions.

  • CNN emphasizes bipartisan responsibility and criticizes populist spending.

• Policy Recommendations and Tone:

  • The New York Times and The Washington Post include expert commentary advocating for tax increases or benefit restructuring.

  • Fox Business and CNN stress immediate economic impacts on seniors and program fragility.

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