WASHINGTON (AP) – The financial condition of the government’s two biggest benefit programs remains shaky, with Medicare expected to become insolvent in just six years, while Social Security will be unable to pay full benefits starting in 2035, the government said Wednesday.
And that’s before factoring what officials acknowledge will be a substantial hit to both programs from the coronavirus pandemic, which has shut down large parts of the U.S. economy and put millions of people out of work.
The depletion dates, which remained unchanged from last year’s estimates, were revealed Wednesday with release of the annual trustees reports of both programs. When Social Security’s reserves are exhausted in 2035, the program will only be able to pay 79% of benefits at that time.
Even if employment rebounds by the end of this year and payroll taxes return to near-normal levels, the shock from the pandemic shutdown could accelerate the depletion of the Social Security trust fund by about six months, officials told reporters.
If a recession extends into next year, it could mean that a depletion would come a full year earlier. The consequences may be worse for the Medicare program, which in this report is estimated to deplete its reserves in 2026.