An earlier day of reckoning isn't good news, but neither is it an insolvency crisis, says law professor Neil Buchanan, of George Washington University. A depleted trust fund doesn't mean the account is empty; new tax revenues will still pay for 76% of benefits promised in 2037. Plus, even after accounting for inflation, payouts are expected to rise along with increases in GDP growth and productivity over the 75 years the trustees projected. So future beneficiaries may be better off than their counterparts today, even if benefits are trimmed.
If lawmakers act soon, they may avoid tax hikes and drastic cuts in future benefits. But, says Chuck Blahous, of the Hudson Institute, the window of opportunity won't last.
For now, Medicare's crisis trumps Social Security's. Medicare's Hospital Insurance trust fund will be depleted by 2017. And over the next two years, monthly premiums for Part B, which covers doctor visits, are expected to jump for new and high-income enrollees.