WASHINGTON — The financial outlook for Medicare’s Hospital Insurance Trust Fund deteriorated in the last year, and Social Security still faces serious long-term financial problems, the Trump administration said Tuesday.
The projections are the first from the administration since President Donald Trump signed a $1.5 trillion tax cut into law in December. They show no sign that a burst of economic growth will significantly improve the finances of the government’s largest entitlement programs.
The Medicare trust fund will be depleted in 2026, the administration said. By contrast, the government said last year that the trust fund would be exhausted in 2029.
In a companion report, federal officials said the Social Security Trust Funds for old-age benefits and disability insurance, taken together, could be depleted in 2034, the same year projected in last year’s report. The fund that helps tens of millions of retirees is expected to be depleted a year earlier than projected last year, while the outlook for the disability trust fund is more favorable.
Still, tax collections would be sufficient to pay about three-fourths of promised Social Security benefits for 75 years.
The report, prepared mostly by nonpolitical actuaries and economists, predicts a 2.4 percent increase in Social Security benefits next year, to keep up with the cost of living. The increase this year was 2 percent.
More than 60 million people are on Social Security, Medicare or both. The two programs account for about 40 percent of all federal spending.
But Trump has paid relatively little attention to either program, declining to embrace a major restructuring of Social Security or Medicare, as some previous Republican presidents have. Nor has he endorsed higher taxes to finance the programs, as some Democrats have suggested.
The number of Medicare beneficiaries is expected to surge to 87 million in 2040, from 60 million this year, according to Medicare actuaries. And the number of people on Social Security is expected to climb to 90 million, from 62 million, in the same period.