COVID-19: Pandemic hurting Social Security
Want another piece of bad news that be blamed, at least in part, on the COVID-19 pandemic? There is now so much financial pressure on Social Security and Medicare that the programs’ trustees have moved up by one year the date for which the depletion of Social Security’s reserves will require reduced payout — 2034 rather than the previous guess of 2035. Medicare is still expected to exhaust its reserves by 2026 … a little more than four years from now.
“The finances of both programs have been significantly affected by the pandemic and the recession of 2020,” the trustees said.
In fact, our nation faces such uncertainty that the trustees were not able to come to a consensus as to what the long-term damage to the two programs might be.
But for now, it seems clear we’ve got a problem that must be dealt with now, rather than employing politicians’ favorite kick-the-can-down-the-road maneuver.
When the Social Security trust fund is depleted the government will be able to pay 78% of scheduled benefits, the report said. Experts who prepared the Social Security report said recent increases in inflation mean the cost-of-living adjustment for 2022 will approach 6%, a big jump from the 1.3% COLA awarded for this year. The Medicare “Part B” premium for outpatient coverage is projected to rise by $10 a month in 2022, to $158.50 under the report’s intermediate assumptions.
Don’t worry, though, the same politicians who have been avoiding solving this problem for decades value their reputations enough that they will likely find some less visible way to cover the shortfall.
It would be nice to believe they would start making sure they can pay for the massive programs for which they are planning. It would be nice to believe fiscal responsibility would be key in fulfilling their obligation to the people they have made dependent on the government for their own financial security.
That is unlikely. Be on the lookout, then, for increased taxes on current workers and other tax and fee increases that are less visible, but do just as much economic damage in covering a shortfall we have known was coming for generations.