Social Security and Medicare Are Racing Toward Drastic Cuts—Yet Lawmakers Refuse To Act
Considering recent news, you may have missed that the 2025 trustees reports for Social Security and Medicare are out. Once again, they confirm what we’ve known for decades: Both programs are barreling straight toward insolvency. The Social Security retirement trust fund and Medicare Hospital Insurance trust fund are each on pace to run dry by 2033.
When that happens, seniors will face an automatic 23 percent cut in their Social Security benefits. Medicare will reduce payments to hospitals by 11 percent. These cuts are not theoretical. They’re baked into the law. If nothing changes, they will be made.
I have nothing against cuts of this size. In fact, if it were up to me, I would cut deeper. Medicare is a terrible source of distortions for our convoluted health care market and needs to be reined in. Social Security was created back when being too old to work meant being poor. That’s no longer the case for as many people.
Thanks to decades of compound investment growth, widespread homeownership, and rising asset values, seniors are no longer the systematically vulnerable group they once were. The top income quintile includes a growing number of retirees who draw substantial incomes from pensions and investment portfolios with Social Security benefits layered on top. These programs have become a transfer of wealth from the relatively poor to the relatively wealthy and old.
Of course, America still has some poor seniors, so cutting across the board is bad. This is why the cuts should be targeted, no
Article from Reason.com
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