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WASHINGTON - Earlier today, the Social Security and Medicare Boards of Trustees met to complete the annual financial review of the programs and to approve the Trustees’ final reports.
I would like to recognize and thank my fellow Trustees for their productive and collegial work this past year, and I know I speak for all of the Trustees when I say this year’s review would not have gone as smoothly without the skill and determination of the chief actuaries, Stephen Goss and Paul Spitalnic, and their staffs. Thank you, everyone, for your hard work.
Social Security and Medicare are the most successful social insurance programs in the history of our nation. Every year, they keep millions of older Americans out of poverty and give every American 65 and older access to affordable health care. These programs fulfill a solemn promise that has been made from one generation to the next, and they embody the values of fairness and opportunity that have been fundamental to our nation’s success.
Today’s reports confirm that both Social Security and Medicare are secure today and will remain secure in the years to come. Consistent with previous years, today’s reports also show that these programs are facing challenges that need to be addressed.
The short-term projections in this year’s report for Social Security and Medicare are little changed from last year while the long-term projections are significantly improved.
When considered on a combined basis, Social Security’s retirement and disability programs have dedicated funds sufficient to cover benefits for nearly two decades, one year longer than was projected last year.. After that time, as was true last year, it is projected that tax income will be sufficient to finance about three-quarters of scheduled benefits.
In addition, as we expected, beginning in late 2016, Social Security’s disability program alone will have dedicated funds sufficient to cover about 80 percent of scheduled benefits. The President has proposed a commonsense solution to improve the solvency of this fund in the short run so that Americans who rely on it will continue to receive the benefits they need. It is vital that Congress move forward to maintain the integrity of this critical program sooner rather than later.
Once again, these reports demonstrate how the Affordable Care Act has bolstered Medicare and shored up the program’s finances. When the President signed health care reform into law, the Trustees projected that it would extend the life of the Medicare Trust Fund by 12 years, from 2017 to 2029. Since then, the Affordable Care Act has helped reduce the rate of health care price increases to their lowest rate in 50 years. As a result, the Trustees have over the past several years revised down their projections of Medicare costs, and the projected life of the Medicare Trust Fund now extends to 2030, even further than estimated when the Affordable Care Act was signed.. The health care law has also put Medicare on more stable footing by combatting fraud, eliminating waste, cutting patient costs, and reshaping payment models toward quality of care, not quantity of care.
Of course, there is more work to do to fix the finances of both Social Security and Medicare. As the President pointed out in last week’s Conference on Aging at the White House, these programs are facing challenges because of demographic trends — including the fact that the largest generation in American history is now reaching retirement age.
The President is determined to protect the future solvency of Social Security and Medicare, and he is committed to keeping these programs strong. While the President will never support proposals that hurt current or future retirees, he is ready to work with Congress on a bipartisan basis to create serious solutions.
To those who say these challenges are intractable, let me point out that just recently Democrats, Republicans, and the administration came together to pass a “permanent doc fix”—something that has eluded Washington for 13 years. Together, we put an end to what had become a perennial manufactured crisis and realized a breakthrough for physicians and those who depend on Medicare, especially seniors and people with disabilities. This measure also improved Medicare’s long-term outlook. We must — and we can — achieve this kind of progress again.
Fifty years ago this month, at the signing of the bill that created Medicare, President Lyndon Johnson declared that this new, historic law was a reminder of the call “never to be indifferent toward despair.” Half a century later, we honor that calling again. We honor it because as Americans we believe that hard work should be rewarded, that the most vulnerable should be protected, and that every one of us, no matter what we look like or where we come from, should have a chance to live with dignity and with security.
Thank you.
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