June 2026 Event: Checking in on the Social Security & Medicare Trust Funds

Why It Matters

The looming depletion of Social Security and Medicare trust funds threatens retirees' benefits and forces policymakers to confront urgent, politically sensitive reforms before 2034.

Key Takeaways

• Social Security OASI reserves deplete by Q4 2032, six years away.
• Medicare Hospital Insurance fund runs out in 2033, one year later.
• Lower fertility assumption (1.75 children) drives long‑term solvency gap.
• Actuarial balance now requires 4.42% payroll tax increase versus 3.82% prior.
• Solutions: raise revenue ~33% or cut benefits ~25% before 2034.

Summary

The June 2026 Committee for Responsible Federal Budget event focused on the latest Social Security and Medicare trustees’ reports, which warn that the Old‑Age and Survivors Insurance (OASI) trust fund will be exhausted by the fourth quarter of 2032 and the Medicare Hospital Insurance fund by 2033. These dates mark the closest approach to insolvency in decades, underscoring an urgent fiscal challenge.

Key drivers include a revised fertility assumption—down to 1.75 children per woman—alongside lower net immigration projections and modestly stronger near‑term economic outlooks. While the Disability Insurance fund remains fully funded, the combined OASDI actuarial balance now calls for a 4.42% payroll‑tax increase to sustain solvency through 2100, up from 3.82% a year earlier. The report also highlights that the long‑run deficit stems largely from fewer workers supporting a growing beneficiary base.

Actuarial chief Karen Glenn emphasized that “it’s a simple math problem, a difficult political problem,” noting that without action, scheduled benefits could fall to 83% of promised levels by 2034 and 65% by 2100. Graphs presented showed the shrinking gap between income and cost, and the near‑term optimism from higher real earnings only temporarily offsets the structural shortfall.

The implications are clear: Congress must act soon—ideally before 2032—to either raise payroll taxes by roughly a third, cut benefits by about a quarter, or adopt a mix of both. Delaying reforms risks reduced benefits, increased taxpayer burden, and heightened political pressure as the safety net approaches its limits.

Original Description

The Social Security and Medicare Trustees released their annual reports on the financial status of the programs. The Trustees find that these programs are approaching insolvency and face large long-term shortfalls, necessitating trust fund solutions.

On June 10, 2026, the Committee for a Responsible Federal Budget hosted a virtual event, Checking in on the Social Security & Medicare Trust Funds. The Social Security Administration’s Chief Actuary, Karen Glenn, gave an overview of the 2026 Social Security Trustees’ Report, followed by a panel discussion from the Committee’s policy experts, including Senior Policy Director Marc Goldwein, Health Policy Director Anna Bonelli, and Social Security Policy Director Mark Sarney.

Glenn and the Committee’s experts walked through the key takeaways from both reports, including the Committee’s analysis of the Social Security and Medicare reports, and the implications of trust fund insolvency. The presentation was followed by a Q&A from attendees.

View the slide deck: https://www.crfb.org/events/610-event-checking-social-security-medicare-trust-funds.