Social Security and Medicare insolvency is now projected within the next decade, with trustees warning that both trust funds will run dry before 2033 unless Congress acts.
The Annual Social Security and Medicare Trustees Reports, released this week after a delay of more than two months, project that the Social Security Old Age and Survivors (OASI) Trust Fund will be exhausted in late 2032. The Medicare Hospital Insurance Trust Fund (Part A) is expected to follow in 2033.
When the OASI fund runs out, CNBC reports that 78% of benefits will remain payable. The trustees project a 22% across-the-board cut to Social Security OASI benefits at that point. Medicare Part A reimbursements face an 11% cut if its fund is depleted.
Medicare’s revenue gap laid bare
The scale of Medicare’s financial shortfall is stark. In 2025, Medicare spent $1.2 trillion on medical services for the nation’s seniors but collected only $568.4 billion in revenue from payroll taxes and monthly premiums, according to the American Action Forum.
The reports were issued without the agreement of two public trustees, positions that have been vacant for more than ten years.
Social Security accounts for 22% of all federal spending. Medicare accounts for a further 14%. Interest payments consume another 14%. Together, those three categories alone account for half of all federal expenditure.
Social Security Medicare insolvency and the case for a fiscal commission
The reports have renewed pressure on Congress to establish a formal mechanism for addressing the long-term shortfall.
The bipartisan Fiscal Commission Act (H.R. 3289), introduced by Representative Bill Huizenga (R-MI) as lead sponsor alongside lead original co-sponsor Representative Scott Peters (D-CA), has been endorsed by the House Problem Solvers Caucus and a number of fiscal watchdog organisations.
The bill would create a statutory commission tasked with producing two separate sets of recommendations. Each set would receive a guaranteed up-or-down vote in Congress.
The first set would focus on restoring the solvency and sustainability of Social Security. The second would address a broader path to a sustainable federal budget.
Keeping the two tracks separate matters for procedural reasons. Under Senate rules, Social Security reform cannot move through budget reconciliation and could therefore be filibustered. A broader debt package, by contrast, could move through reconciliation and would not be subject to a filibuster. Separating the two prevents a potential Social Security filibuster from blocking wider fiscal reform.
Congress has repeatedly deferred action on both programmes despite the warnings in successive annual trustees reports. Before the Great Depression, the federal budget was constrained by two rules: formal constitutional limits on enumerated spending powers, and an informal norm that borrowing was reserved for recessions and wars. Neither constraint remains in place.
With the United States marking its 250th anniversary, advocates for the commission say the moment calls for a reset of fiscal discipline. The Huizenga-Peters bill is currently before the House.
