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Mnuchin touts growth as solution to Social Security, Medicare woes

Mnuchin touts growth as solution to Social Security, Medicare woes
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Treasury Secretary Steve Mnuchin on Thursday called for economic growth as a palliative for Social Security and Medicare trust funds after a new report reaffirmed the limited financial lifespans of both programs.
 
“To help make these programs sustainable into the future, we should focus on strengthening the economy today. Compounding growth will help ease projected shortfalls,” he said.
 
The Trump administration has relied on the promise of higher economic growth as a means of solving budgetary and fiscal woes, as well as keeping certain reforms revenue neutral. 
 
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Thursday’s annual report of the Social Security and Medicare Boards of Trustees found that Social Security’s fund would run out in 2034 — consistent with last year’s findings — and that scheduled tax revenues would only be able to cover about three-fourths of the expenses after that.
 
Medicare’s HI trust fund, which covers hospital stays, skilled nursing facilities and hospice care, will run out in 2029, one year more than was projected in the previous report. At that point, ongoing revenues would only be able to pay for 88 percent of the benefits. 
 
The other portions of Medicare, SMI (Supplementary Medical Insurance, also known as Parts B and D), are adequately financed, according to the report, because general revenues and beneficiary premiums cover the costs. That said, those costs are expected to rise from the current 2.1 percent of GDP to 3.4 percent of GDP by 2037.
 
The report comes as Congress debates several measures that would affect the country’s finances: A healthcare bill that would reduce Medicaid payments, and a budget that would limit payouts from the Disability Insurance portion of Social Security and cut other forms of spending.
 
Aside from the disability insurance, the White House has insisted that its fiscal program would leave Medicare and Social Security untouched, much to the frustration of deficit hawks that see the programs as key drivers of spending. 
 
The two programs accounted for 42 percent of federal expenditures in 2016.