00:00According to the annual trustees' reports, released recently by the U.S. Treasury Department,
00:06both the Social Security and Medicare programs are projected to face significant financial challenges.
00:13Specifically, there is a risk that by the year 2033,
00:17these programs will run short of funds required to pay full benefits to their beneficiaries.
00:23This projection indicates that, without congressional intervention,
00:27the Social Security Old Age and Survivors Trust Fund will only be able to pay 77% of scheduled benefits once its reserves are depleted.
00:37This 2033 depletion year for the Social Security Fund, while unchanged from last year's report,
00:44has been advanced by three calendar quarters within that year.
00:47This internal shift reflects the impact of a legislative change enacted on January 5th,
00:53which had the effect of increasing projected benefits for certain former public sector workers
00:58whose pensions were not covered by Social Security.
01:02Similarly, the Medicare Trust Fund, which supports hospital insurance, is also projected to be depleted in 2033.
01:10This is a significant acceleration, as it's three years earlier than the projection from last year.
01:17The worsening of Medicare's financial outlook is primarily attributed to higher-than-forecast expenditures
01:23for hospitalizations of Americans over 65 years old.
01:28Once this fund is exhausted, Medicare is forecast to be able to cover only 89% of scheduled benefits.
01:36The trustees' reports underscore that both Social Security and Medicare continue to face substantial financing issues.
01:43Experts emphasize that taking action sooner rather than later will allow consideration of a broader range of solutions
01:50and provide more time to phase in changes so that the public has adequate time to prepare.
01:56Indeed, any politician who does not support increasing Social Security's revenue is, by default,
02:04supporting benefit cuts, as the law mandates automatic reductions if no changes are made once the trust fund is exhausted.
02:13This situation highlights the urgency for lawmakers to address these shortfalls proactively
02:18to ensure the long-term solvency of these crucial programs.
02:22Money Explainers
Comentarios