As President Donald Trump and Congress fumble through his One Big Beautiful Bill on the budget for fiscal year 2025-26, they have been ignoring the mastodon in the room: Social Security and Medicare are heading into depletion.

The funds are not in immediate danger. But according to the annual report of the funds’ Board of Trustees, the Old-Age and Survivors Insurance Trust Fund, the key part of Social Security, can pay 100% of benefits only until 2033, the same estimate as last year. After that, “the fund’s reserves will become depleted” and be able to pay only 77% of scheduled benefits.

It’s similar for the Hospital Insurance Trust Fund, or Medicare Part A, which pays for inpatient hospital and other care. It also can pay 100% of benefits until 2033, after which it will be able to pay only 89%. Even worse, the projected depletion date has moved up three years—from 2036 in last year’s report to 2033 now.

The loss of those three years “is a stark warning about the unsustainability of the program and its sensitivity to health care consumption and price fluctuations,” Romina Boccia, director of budget and entitlement policy at the Cato Institute and the co-author of the forthcoming book, “Reimagining Social Security: Global Lessons for Retirement Policy Changes.” She said both reserve depletion dates depend on economic conditions, with a recession worsening the funds’ status.

As Boccia and co-author Ivane Nachkebia noted in a policy brief about Social Security, “In a free society, individuals are best equipped to provide for their own retirement savings, with charities, congregations, family, friends and other voluntary sources — not forced government redistribution — as the safety net for poor seniors. Falling short of this ideal, government intervention should aim to alleviate poverty among the poorest seniors, not crowd out private savings.”

Alas, we have the system we have for now and it’s on the ropes thanks to demographic pressures and mismanagement of the system.

To stabilize the system, Boccia recommends replacing government administration of Medicare with empowering consumers to shop for plans. For Social Security, the retirement age should be raised and benefit growth slowed for higher earners.

Unfortunately, such reforms remain the “third rail” of American politics, meaning touch them and you die politically. Americans on the left and right seemingly believe that they can and should have big government welfarism but not have to pay for it.

Their representatives reflect this back, either out of ignorance or fear of political consequences for speaking the truth.

With reform stalled as long as both parties insist on pretending nothing is wrong here, Americans should shore up 401(k) and other private retirement plans.

— From Tribune News Service