Middle-Class Entitlements Running Out

There was bad news yesterday about the two main middle class entitlements. The Medicare trust fund will be depleted in eight years according to the latest estimate.

Social Security and Medicare, often classified as middle-class entitlements, are showing financial stress.

There was bad news yesterday about the two main middle-class entitlements. The Medicare trust fund will be depleted in eight years according to the latest estimate. This is three years sooner than expected according to previous reports. Is THIS new report accurate or will the Medicare trust fund get emptied even earlier than 2026? It’s hard to trust a report when the government has a history of underestimating the problem.

The Hill reports, “Medicare trust fund to be depleted years earlier than expected, trustees project.

A Medicare Trustees report released Tuesday finds that Medicare’s trust fund will be depleted in 2026, three years earlier than last year’s report found.

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“The Trustees recommend that Congress and the executive branch work closely together with a sense of urgency to address the depletion of the [trust fund] and the projected growth [in spending],” the trustees report states.

“Consideration of further reforms should occur in the near future,” it continues. “The sooner solutions are enacted, the more flexible and gradual they can be.”

The trust fund covers costs in Medicare Part A, which covers hospital care. Care in Medicare Part B, which covers doctor visits, has a separate source of funding, collected through premiums.

The Social Security Trust Fund is projected to remain solvent until 2034, no change from last year’s projection.

Treasury Secretary Steve Mnuchin said in a statement Tuesday that both Medicare and Social Security “remain secure,” though he noted long-term challenges.

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But even though the Social Security Trust Fund is still expected to remain solvent for sixteen years, there is another problem. The Wall Street Journal reports, “Social Security Expected to Dip Into Its Reserves This Year.

The Social Security program’s costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits.

This is three years sooner than expected a year ago, partly due to lower economic growth projections, according to the latest annual report the trustees of Social Security and Medicare released Tuesday. The program’s income comes from tax revenue and interest from its trust fund.

The trust fund will be depleted in 2034 and Social Security will no longer be able to pay its full scheduled benefits unless Congress takes action to shore up the program’s finances. Without any changes, recipients then would receive only about three-quarters of their scheduled benefits from incoming tax revenues.


Over time, the trust fund has grown to nearly $3 trillion. But long-running demographic trends threaten its finances. Last year, there were 2.8 workers for every Social Security recipient, down from 3.3 in 2007.

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