As it stands, both Medicare and Social Security will run out of money in their trusts in the next decade and be forced to reduce the benefits offered. Already, these programs constitute more than a third of all federal spending (nearly half if you include medicaid), and the costs are expected to rise further as the population ages and as the cost of medical care increases. The Affordable Care Act AKA Obamacare implemented changes that reduced the expected budget shortfall by more than 75%, but there is still more that can be done.
There are, as always, two ways to fix this lack of funding: cut costs or increase revenue. No one wants to reduce the services provided, so is it possible to provide the same services at a lower cost? In other developed nations, public health care is funded at about the same rate when expressed as a percentage of GDP, but that covers their entire population. Clearly, our system has a lot of room for improvement in terms of cost, such as by not paying such exorbitant rates for prescription drugs. Social Security, on the other hand, gives money to the recipients directly as income, so cutting costs here is not feasible.
As for revenue, both programs are supposed to be funded from payroll taxes, but with the changing demographics the ratio of workers to beneficiaries will drop from 3:1 to 2:1. Even now, additional funding is being drawn from other sources. The largest source of potential revenue is corporate income taxes. While the corporate tax rate was theoretically 35% (now 21% with the 2017 tax cuts), the actual taxes paid were roughly 7% of corporate profits. If corporations paid even the new 21% rate, that would add half a trillion dollars to the budget.
In short, there is more than enough money available to continue to fund these programs in the coming decades, so long as we can keep corporate greed in check. A report from the Center for Budget and Policy Priorities gives an excellent overview of the issue and some of the measures that can be taken to counter it. Most of these are matters of policy, so get in contact with your representative and senators, tell them to seek a solution that will keep Medicare solvent while keeping all of its benefits.
As for revenue, both programs are supposed to be funded from payroll taxes, but with the changing demographics the ratio of workers to beneficiaries will drop from 3:1 to 2:1. Even now, additional funding is being drawn from other sources. The largest source of potential revenue is corporate income taxes. While the corporate tax rate was theoretically 35% (now 21% with the 2017 tax cuts), the actual taxes paid were roughly 7% of corporate profits. If corporations paid even the new 21% rate, that would add half a trillion dollars to the budget.
In short, there is more than enough money available to continue to fund these programs in the coming decades, so long as we can keep corporate greed in check. A report from the Center for Budget and Policy Priorities gives an excellent overview of the issue and some of the measures that can be taken to counter it. Most of these are matters of policy, so get in contact with your representative and senators, tell them to seek a solution that will keep Medicare solvent while keeping all of its benefits.
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