Summary
New data shows that the United States' unfunded social insurance obligations have increased significantly, mostly due to Social Security and Medicare shortfalls. The shortfall in Social Security is growing and could lead to benefit cuts or higher taxes if not addressed. Medicare Part B has also contributed to the rise in the funding gap.
Key Facts
- The United States' 75-year unfunded social insurance obligations increased by $10.1 trillion in one year.
- Social Security's projected shortfall alone grew by $2.5 trillion.
- Medicare Part B saw a $6.9 trillion increase in projected shortfalls.
- Social Security provides benefits to over 70 million people, including retirees and disabled workers.
- Without changes, current beneficiaries might see a 20-30% reduction in benefits once trust funds run low.
- The Social Security Fairness Act allowed more people to qualify for benefits, adding to the funding gap.
- Social Security and Medicare will pay full benefits until the trust funds are depleted, after which automatic cuts could happen unless Congress intervenes.
