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3w ago

Senate Tax Plan Would Advance Social Security and Medicare Insolvency to 2032

Senate Republicans’ tax cuts would accelerate projections of depletion dates—late 2033 for Medicare HI, Q3 2034 for Social Security—triggering deeper benefit reductions

(iStockphoto)
Social Security card and Medicare enrollment form

Overview

  • At projected exhaustion dates the Social Security Trust Fund would cover just 81% of scheduled OASI benefits and Medicare HI would cover 89% of promised payouts, the trustees warn.
  • The Senate’s One Big Beautiful Bill Act would expand senior deductions and extend tax cuts that reduce benefit taxation by about $30 billion per year, hastening insolvency to late 2032 for Social Security and mid-2032 for Medicare HI, according to CRFB analysis.
  • Under the bill’s timelines, Social Security benefits could face an automatic 24% across-the-board cut and Medicare payments an 11% reduction once the trust funds deplete.
  • An AEI study warns that immigration crackdowns may cut payroll-tax revenues by up to $27 billion annually by 2034, potentially shifting exhaustion to late 2033 for Social Security and early 2032 for Medicare HI.
  • The trustees estimate a 75-year actuarial shortfall of 3.82% of payroll, rising to 4.95% under lower fertility and immigration scenarios, underscoring the need for prompt bipartisan reforms.