Washington policymakers are pledging to exclude Social Security and Medicare from this year’s debt ceiling and spending negotiations, but that doesn’t keep those popular entitlements from inching dangerously close to running out of money.
Social Security and Medicare are on track to go bust in 12 years, meaning people who are now 55 will get hit with significant benefit cuts unless Congress acts.
Once the trust fund runs dry, Medicare will face a 10% budget shortfall starting in 2029, when patients are likely to see a cut in services for hospital stays and hospice. The trust fund does not cover other parts of Medicare such as subsidies for prescription drugs and physician visits, which are funded by patient premiums and state governments.
Lawmakers acknowledge that both programs are facing a looming crisis, but few agree on how or when to do something about it. The remark drew jeers from Republican lawmakers who accuse Mr. Biden of fearmongering because they’ve walled-off entitlements. Despite having significant bipartisan support, it is unclear whether a “rescue committee” would be able to devise a successful plan. That’s because lawmakers are bitterly divided on how to fund the politically popular programs.
Republicans are unlikely to go for the cap because they want to see defense spending increase, especially as the U.S. faces geopolitical challenges from Russia and China. Democrats, meanwhile, have been opposed to cutting spending for social welfare programs amid high inflation that recently peaked at a 40-year high.
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