Every four years, an independent panel of distinguished economists, demographers, and actuaries reviews the methodology and assumptions underlying the trustees’ report. The most recent panel, which issued its report in September 2011, found that the trustees’ projections for the next 50 years are, if anything, a bit too pessimistic. Adopting the panel’s recommended changes to the trustees’ assumptions would add a year of solvency to the Social Security trust funds.
Although Social Security can pay full benefits for two decades even if Congress does nothing to close the program’s long-term funding shortfall, prompt action would permit changes that are gradual rather than sudden, allowing people to plan their work, savings, and retirement with greater certainty. But policymakers and the public should not be panicked by false claims about Social Security’s finances.
Medicare, on the other hand, isn’t as comparatively well off. But again, the solutions are simple: phase in Medicare tax hikes on wealthier earners, and gradually increase the income cap on the Social Security tax. Problem solved.