Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program’s actuary.
Meanwhile President Obama’s health care overhaul has given Medicare’s basic Hospital Insurance an extra 12 years of financial stability, though it did not solve all of the program’s long-term challenges.
“The financial status of the HI trust fund is substantially improved by the lower expenditures and additional tax revenues instituted by the Affordable Care Act,” the program’s actuary said in its annual report. “These changes are estimated to postpone the exhaustion of HI trust fund assets from 2017 under the prior law to 2029 under current law and to 2028 under the alternative scenario.”
But the actuary said the programs’ finances are still troubled in the near and long terms, and warned that Congress is making things worse by putting off scheduled doctor fee cuts.
The Obama administration said the report shows the success of the health care overhaul, which passed earlier this year on the strength of Democratic votes.
“The impact of health care reform is made clear by the Trustees Reports, which show some very positive developments for Social Security and especially Medicare,” said Treasury Secretary Timothy F. Geithner. “But they also remind us that we must continue to make progress addressing the financing challenges facing the long-term solvency of these programs.”
Some of the grimmest immediate news comes in Social Security, where benefit payouts will exceed revenues this year for the first time since Democrats and Republicans came together to overhaul it in the 1980s.
The deficit will last through 2011, then an improving economy will put it back into balance for three years, then it will dip back into the red in 2015, the actuary said. The program has enough money in its trust fund to cover the annual deficit for two decades beyond that.