Social Security card and Medicare card. (Getty Images.)
Supporters say huge numbers of seniors in Ohio will likely fall into poverty unless Congress does something to fix Social Security and Medicare.
Last Tuesday, the Social Security and Medicare Oversight Board released a report stating that both programs will become insolvent in less than a decade.
This does not mean that the programs will be closed completely, but it does mean a enormous reduction in benefits. The nonpartisan Committee for a Responsible Federal Budget estimates that more than 2 million Ohioans they will lose an average of $487 per monthand will cost the state $12.1 billion from 2032.
Medicare Part A, the program that covers hospital and home care, is projected to become insolvent by 2033.
If it happens, it happens reduce the amount spent on care by 11% the commission estimates that more and more Ohioans will age and become ill. This comes at a time when rural and inner-city hospitals are already stressed they lose billions due to Medicaid cuts, – according to an analysis by the Commonwealth Fund
Ohio is among the states more vulnerable to a shortage. It has 20th largest population over 65 years of ageand 18th largest – according to KFF – from 55 to 64.
And AARP Ohio reports that the program is taking hold over 700,000 Ohio seniors have been lifted out of poverty.
“The time to act is now,” he said AARP Ohio Director Jenny Carlson.
“The trustee’s report puts Congress in the right place,” Carlson said in an interview.
“We have 2.5 million Ohioans covered by Social Security. We will continue to be fierce defenders of Social Security. We worked. We paid. We earned these benefits. That’s why Congress must act now to protect full benefits and strengthen Social Security.”
Carlson said she is especially concerned about low-income seniors. The average Social Security beneficiary in Ohio receives about $1,900 a month – or $23,000 a year – in benefits.
“For many Ohioans, this is enough to cover basic needs,” she said. “Think about groceries, housing, utilities, prescriptions and health care costs.”
Carlson said if their Social Security is cut, state and local governments will have to deal with the consequences.
“The risk is that if you kick the can down the road – if benefits are cut – it will impact basic needs and put more pressure on state budgets because people may become (Medicaid AND Medicare) qualifies. And they qualify for food stamps,” she added.
“It also puts pressure on community services provided at the county level.”
Experts have blamed the shortfall on several factors, including an aging population and decades of tax cuts and other policies that have accelerated income inequality. But they were most critical of Congress’s passivity.
“The Social Security trust fund is under pressure because Congress has failed to update the program for the economy we actually have,” Elizabeth Wilkins, president and CEO of the Roosevelt Institute, said in a written statement.
“Now too much income flows upwardswhere it avoids Social Security taxes. Too many workers have experienced poor wage growth. And the government’s weak response to the Great Recession hurt labor participation and wages, and therefore weakened reserves.”
Wilkins referred in part to the fact that wage earners pay: 6.2% National Insurance Tax only on the first $184,000 of income. This tax is covered by employers.
For its part, Medicare is taxed at an employer-matching rate of 1.45%, which is not subject to an income limitation.
Social Security retirement income is already less than planned benefits.
By 2032 “the fund’s reserves will be depleted and the regular income from the program will be sufficient to pay 78 percent of the total scheduled benefits,” the trustees of the Social Insurance Institution said last Tuesday. written declaration.
The Medicare Hospitalization Insurance Fund is also not meeting expectations. If not strengthened, it will require an 11% cut in 2033, rising to 16% by 2040, the Committee for a Responsible Federal Budget said.
When Social Security and Medicare faced insolvency in 1981, Congress passed bridge financing and created a commission to propose a long-term solution.
In 1983, Congress introduced amendments to the Social Security Act that were intended to strengthen the system for 75 years.
However, they did not perfectly predict the future – including how quickly inequality will grow.
Experts say Congress has failed to address the issue since then.
“Instead of talking about solutions to these real funding problems, leaders in Washington are instead demagogueing each other on the issue, with both sides promising not to touch the programs,” the Committee for a Responsible Federal Budget said in a written statement.
“Unfortunately, this promise is tacit support for across-the-board cuts that will follow once resources are exhausted, which is an unacceptable outcome. No country would be spared from the consequences of failing to protect these programs from insolvency – every member of the House and Senate has constituents who rely on these programs.”
The committee added that the Republican budget bill passed last summer only made the problem worse.
This cut taxes on the richest 1% of Americans by about $1 trillion over 10 years while cutting a similar amount from health and nutrition programs for the impoverished, further widening inequality.
“…thanks largely to the tax cuts in the ‘One Big Beautiful Bill’ and worsening demographics, the projected Social Security shortfall is a full 16% greater than last year,” the budget watchdog said. “The Medicare shortfall is 33% greater.”
The staff of Ohio GOP Sen. Jon Husted, who voted in favor Billdid not respond to questions for this story.
Husted’s Democratic challenger accused Husted of trying to make Social Security shortfalls even worse by making proposals balanced budget amendment.
In announcing the amendment, Husted chided Congress for its “lack of discipline” but stopped compact of saying Social Security and Medicaid would have to be cut to balance the budget.
A spokeswoman for former Ohio Democratic Sen. Sherrod Brown sharply criticized the proposal and Husted’s other votes.
“Instead of focusing on lowering costs for Ohio families, Jon Husted ended his first year in the Senate by proposing a plan that would cut Social Security and Medicare,” spokeswoman Lauren Chou said in an email.
“Husted has already voted nine times to raise health care costs and throw nearly half a million Ohioans off insurance – all to give billionaires the largest tax cut in American history. Sherrod Brown fought to restore Social Security benefits to a quarter of a million Ohio workers and will continue to advocate for hard-working Ohioans.”
Congress will likely face intense pressure to find a solution.
One idea is to remove the income ceiling above which wealthy Americans stop contributing to the system. But experts say it’s too little, too slow.
“Congress has waited too long for a single policy to effectively solve this problem.” Stephen Nuñezdirector of the Roosevelt Institute on Stratification Economics, said in an email. “If policymakers had taken action 10 or 20 years ago, lifting the cap would have gone much further.”
Nuñez he added: “Instead, unchecked income inequality and economic mismanagement have further undermined the foundations of the program. That’s why we need a multi-pronged approach going forward. One that demands more of the wealthiest, closes tax-escape loopholes, and protects and expands benefits.”
The Committee for a Responsible Federal Budget lists several possible approaches:
- Six-figure limit — Limiting annual benefits for the wealthiest retirees at normal retirement age (67 for those born in 1960) to $100,000 for couples and $50,000 for individuals. It is estimated that if the cap is indexed to inflation, a 20% solvency gap will be closed.
- COLA chapter — Limiting cost-of-living adjustments and indexing them to a measure of inflation known as “chain CPI” This is estimated to close 10% of the solvency gap when applied to the top quarter of recipients.
- Employer payroll tax — Replacing employer contributions to Social Security and Medicare with a flat tax on all wages — including huge CEO salaries and their gold-backed benefits. The measure is estimated to cover as much as 66% of the Social Security shortfall and half of the Medicare gap.
With 38 million members nationwide known for their propensity to vote, AARP is one of… of the most powerful lobbying organizations in the United States.
Carlson, the organization’s Ohio director, said he will press lawmakers to make sure Social Security and Medicare keep faith in the people who pay for them.
“Advocacy is our backbone,” she said. “Consumers across the state and across the country need to know they have a strong voice in Congress and the states saying we will defend the solvency of Social Security and Medicare. We’ve been doing that for 60 years.”
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