The Social Security disability trust fund will run out of money in late 2016 and the Medicare program's trust fund for hospital care will run out of money in 2030, the trustees that oversee the programs warned on Wednesday in their 2015 Social Security and Medicare trustees reports.
Unless Congress acts soon, the 11 million people who receive Social Security disability could face an automatic 19 percent cut in benefits in late 2016, right in the middle of a presidential campaign, reported The Associated Press.
Disabled workers and their families receive on average $1,017 per month, meaning the typical beneficiary would have their benefits cut by $193 per month.
The report called it "an urgent threat," but there is an easy fix that has been done before: Congress could redirect tax revenue from Social Security's larger retirement fund. Trustees said that if the two funds were combined, benefits could be paid in full until 2034.
That may be easier said than done, though. President Obama has voiced support for the move, but Republicans have called for changes to the program to reduce fraud and encourage disabled workers to start working again, as Forbes explains.
"The president has proposed a commonsense solution to improve the solvency of this fund in the short run so that Americans who rely on it will continue to receive the benefits they need," Treasury Secretary Jacob Lew said, according to AP. "It is vital that Congress move forward to maintain the integrity of this critical program sooner rather than later."
As for Medicare, the trustees said that the program's trust fund for hospital care will run out of money in 2030, reports Reuters.
"Notwithstanding the assumption of a substantial slowdown of per capita health expenditure growth ... Medicare still faces a substantial financial shortfall," the report says.
With payroll tax collections at its current rate, the program would be able to pay about 86 percent of costs in 2030, and only 80 percent by 2050.
The funding gap over the long run does seem to have narrowed due to expectations of decreasing future health care costs, but still, the trustees urged politicians to enact new laws to stop cuts from happening.
