Social Security reserves forecast to run dry in 2022

Social Security’s bank account will go bust in 2022 — the first time the program’s combined trust funds will run a deficit, according to President Obama’s budget released Monday.

One of Medicare’s trust funds also will be in the red for much of the next decade, according to the numbers in the briefing book that the White House provided to Congress along with the budget, which lays out Mr. Obama’s tax and spending plans for fiscal year 2013 and beyond.

Social Security has taken in less in taxes than it has paid out in benefits since 2010, but the shortfall has beenmade up as the government has dipped into IOUs left in the trust funds from previous years.

Monday’s numbers, though, show the combined trust fund itself will run a deficit of $2.6 billion in 2022.

Together, Medicare and Social Security make up what Republicans called the “twin tidal waves” of an impending fiscal calamity. Combined with Medicaid, the three big entitlements will equal nearly 15 percent of U.S. gross domestic product by 2022.

Mr. Obama did not propose any broad changes in his blueprint, but the White House said he did take some small steps on Medicare and Medicaid, calling for slicing out $362 billion from what the programs would have spent over the next decade, or 1.7 percent of the 10-year cost for both programs.

“It doesn’t mean we’ve solved every problem for the country going forward. Certainly, that wouldn’t be the case,” said White House press secretary Jay Carney. “But it does it in a responsible way, and it does it in a way that proves, as other bipartisan commissions have shown, that you do not have to decimate Medicare, end it as we know it.”

All sides agree that entitlement programs are the major driver in deficits and long-term debt, and will soon begin to crowd out regular defense and domestic needs.

Both parties have struggled to summon the courage to find a solution.

In his budget, Mr. Obama focused instead on shorter-term issues. He proposed some specific spending boosts, accompanied by cuts elsewhere, and spent most of his effort pushing for tax increases on the wealthiest Americans, arguing that the budget and economic fairness demanded it.

In his seven-page letter to Congress, Mr. Obama didn’t mention Social Security, but he did praise changes to Medicare and Medicaid that he said would sweat out more than $360 billion in savings.

Chief among those efforts is means-testing two parts of Medicare so that higher-income seniors would pay more for their coverage.

“The goal of these reforms is to make these critical programs more effective and efficient, and help make sure our health care system rewards high-quality medicine,” Mr. Obama said in his letter to Congress. “What it does not do — and what I will not support — are efforts to turn Medicare into a voucher or Medicaid into a block grant. Doing so would weaken both programs and break the promise that we have made to American seniors, people with disabilities, and low-income families, a promise I am committed to keeping.”

Republicans said if Mr. Obama sees the same dire long-term numbers on Medicare and Social Security, he should have suggested serious changes.

“If you share the view that there ought to be changes in the ‘out years,’ why aren’t they in the budget?” said Sen. Jeff Sessions of Alabama, the ranking Republican on the Senate Budget Committee. “If you recognize, I think, as all of us do, that Medicare, Social Security and Medicaid are programs in dire danger and need to be fixed, why don’t you do it today?”

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