The Social Security trustees issue reports on the health of the Social Security trust funds every so often and you may have heard that if nothing changes, beginning in 2034, there will be a 23 percent reduction in Social Security benefits due to the agency’s depleted trust funds. This is something we have known for quite some time, but few politicians are interested in offering solutions. Additionally, Medicare will only be able to meet 91 percent of hospital insurance costs beginning in 2026.
In contrast to making specific changes in either program to extend the life of Social Security and Medicare President Donald Trump and his Secretary of the Treasury Steve Mnuchin, who is also Social Security’s head trustee, offer that increased economic growth is the solution to saving Social Security and Medicare.
According to a recent MarketWatch editorial, Mnuchin has previously said tax cuts, fewer regulations, and better trade deals will boost economic grow and improve revenues, extending the life of Social Security and Medicare. If this is the White House’s approach to saving Social Security, it is a risky one.
During the first quarter of 2018, the U.S. Department of Commerce indicated that the economy grew at an annual pace of 2.2 percent, but this was down from 2.9 percent in the fourth quarter of 2017.
When it comes to trade deals as part of the solution, there have been no new trade deals. In fact, the United States is in the middle of a trade fight with its biggest trading partners, Canada, Mexico, China and the European Union.
The Trump Administration has been in office for 19 months now and the economic growth solution has not changed the needle on when Social Security and Medicare will be depleted.
