Social Security, Medicare gain years before benefit cuts

President Joe Biden touting Medicare protection — Without action from Congress, Social Security and Medicare will not be able to pay full benefits starting in 2035

(Image credit: Mandel Ngan / AFP via Getty Images)

What happened

Medicare and Social Security have a little longer than previously forecast before they run out of money, thanks to low unemployment and rising wages plus lower expenses, trustees of the two social welfare programs said Monday. Medicare's trust fund for hospital expenses will see its reserves depleted in 2036, five years later than projected last year, and Social Security's combined retirement and disability funds will pay full benefits until 2035, a year longer than expected.

Who said what

The report offers a "measure of good news," but "Congress still needs to act" to avoid benefit cuts, Social Security Commissioner Martin O'Malley told The Associated Press. With 71 million people receiving Social Security benefits, "the stakes are simply too high to do nothing," AARP CEO Jo Ann Jenkins said.

What next?

Without congressional action, Social Security is projected to start paying out 83% of benefits in 2035 and Medicare will pay out 89%. President Joe Biden said he won't allow cuts to benefits, suggesting uncapping taxes on high-earners. Some Republicans have proposed cutting benefits or raising the retirement age.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.