WASHINGTON—A new report contains blunt warning signs of an approaching fiscal crisis in federal trust funds backing Social Security, Medicare, flood insurance, and many other programs, according to Senate Budget Committee Chairman Mike Enzi (R-Wyo.).
“The GAO’s new report is another warning sign that Social Security, Medicare, and other trust fund programs on which many Americans rely are in danger of going broke,” Enzi said Jan. 23 in releasing the Government Accounting Office (GAO) analysis.
Braun said the report highlights the need for political leaders to confront the trust fund problem without further delays.
“The nation is $23 trillion in debt and is now running trillion-dollar deficits,” Braun said in the statement. “Congress needs to come together and make tough decisions to preserve these trust fund programs that so many Americans depend on for their way of life—for today and for generations to come.”
The collective total for all federal trust fund balances increased between fiscal years 2014 and 2018, according to Enzi and Braun, but that balance will begin declining in 2022, with decreases in Social Security and the Medicare Hospital Insurance funds leading the way.
A senior Senate Republican aide, speaking on background on Jan. 24, told The Epoch Times that the crucial message from the GAO analysis is that “while every major federal department has trust funds, many of them are not fully supported by dedicated revenues and are in danger of becoming insolvent in the near future.”
- By 2022, the federal Highway Trust Fund will be so depleted that its income will be insufficient to meet projected obligations for infrastructure repairs and construction.
- By 2025, the Pension Benefit Guarantee Corporation (PBGC) multi-employer trust fund is rapidly depleting and will not be able to pay full benefits in plans that go insolvent.
- By 2026, the Medicare Hospital Insurance Trust Fund will be so depleted that its income will only be sufficient to pay 89 percent of scheduled benefits.
- By 2034, the Social Security Old-Age and Survivors Insurance (OASI) trust fund will be so depleted that its income will only fund 77 percent of scheduled benefits.
In addition, many of the federal trust funds are linked to programs that legally entitle recipients to the benefits, thus potentially prompting an explosion of litigation in legal challenges to congressional actions to lower payments.