Social Security financial lifespan shortened three years

The lifespan of Social Security trust fund has been shortened three years because of high energy prices and a slow economy, trustees said Monday.

Social Security benefits will now run out in 2033, said its trustees in an annual report released today.

The Medicare fund for seniors' health care is scheduled to run dry in 2024, which is unchanged from last year, largely because of a 2 percentage point cut enacted by Congress last year.

But the trustees wrote in their report that "Medicare's actual future costs are highly uncertain and are likely to exceed those shown" by existing data.

"Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare," the trustees wrote in their report.

They added: "If they take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare."

President Obama and Republican critics generally agree that entitlement programs are major drivers of the federal debt, but have not reached a comprehensive agreement on how to address the programs or the red ink.

Lawmakers from each party issued statements blaming the other.

"The biggest threat to Medicare and Social Security is doing nothing, and the refusal of the White House and congressional Democrats to address our fiscal challenges will have devastating consequences for America's seniors," said House Speaker John Boehner, R-Ohio.

House Minority Whip Steny Hoyer, D-Md., said the Obama health care plan will help save money in Medicare, while Republican budget plans threaten both it and Social Security.

"While Republicans would repeal the Affordable Care Act and are doubling-down on a budget that ends the Medicare guarantee, Democrats will continue to stand up for Social Security and Medicare," Hoyer said.

Reports Reuters:

The trustees said a key factor in revising the Social Security estimate was the view that Americans' average real earnings were likely to grow more slowly than previously thought, thus crimping revenues from taxes that finance the fund.

The benefits programs (Social Security and Medicare) account for 36 percent of U.S. budget spending and are the two largest federal expenditures.