Social Security won't be able to fund full payouts by 2035

The Social Security retirement program will be unable to pay full benefits by 2035, according to a new report issued Monday by the Trump administration. 

Without reforms, the report says, payments to beneficiaries would have to be cut by 25 percent starting in 2035 to keep the program solvent. 

The report said the program's roughly $3 trillion in reserves will be depleted by 2035.

The government will have to tap into those reserves beginning in 2020, when the costs of the program will begin exceeding the income it receives from taxes.

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That's a small improvement from last year's report, which estimated the reserves would be depleted by 2034.

The trust fund for Medicare that pays for hospital care will run out of money by 2026, an unchanged prediction from last year's report. 

Medicare's overall costs are expected to rise to 5.9 percent of the gross domestic product by 2038, up from 3.7 percent in 2018.

The faster rate of growth is tied to more people aging into the program, the report says, as well as increases in the volume and intensity of health care services. 

House Ways and Means Committee Chairman Richard NealRichard Edmund NealDemocrat: Treasury 'acknowledged the unprecedented process' in Trump tax return rejection House votes to repeal ObamaCare's 'Cadillac tax' Finish the work of building a renewable fuels industry MORE (D-Mass.) blamed "years of Republicans' harmful policies" for the poor financial condition of the program. 

“As Ways & Means Chairman, I believe deeply in this Committee’s ability – and responsibility – to find solutions that provide more Americans with the economic security they need to support their families and have financial peace of mind," he said in a statement. 

Rep. Kevin BradyKevin Patrick BradyBlue states sue Treasury, IRS over rules blocking Trump tax law workarounds Manufacturers group lobbies Congress for new North America trade deal Lawmakers join Nats Park fundraiser for DC kids charity MORE (Texas), the top Republican on the committee, said both parties should work together to reform the program. 

"Today’s Trustees Report is an important reminder that the time to act is now," Brady said.  

Budget watchdogs said that the longer reforms to the program are put off, the more painful they will be to carry out

"Every day that passes, the problem gets bigger and the solutions become more difficult to implement," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a non-partisan advocacy group.

A 16-year runway, she noted, means that today's 51-year-olds will not be able to collect their full benefits unless there is action.

She also had a message for Democrats who are calling to expand the program's benefits.

"Certainly we should be focused on saving Social Security and Medicare before we start promising to expand these programs," she said.

But retirement advocates worry that reforms would also act to cut benefits from people that depend on them, and argue that more revenues are the way forward.

“Americans have earned their Social Security and Medicare benefits through a lifetime of hard work," said Richard Fiesta, executive director of the Alliance for Retired Americans.

"If we remove the cap on earnings subject to Social Security contributions for the wealthiest Americans, we can expand Social Security benefits, provide a more accurate formula for cost-of-living adjustments, and increase the system’s long-term solvency," he added.

Monday's report found that Social Security provided benefits to 63 million people in 2018, including 47 million retired workers and their dependents, 6 million survivors of deceased beneficiaries, and 10 million disabled workers and their dependents.

Some two-thirds of seniors who benefit from the program rely on it for most of their income, according to Social Security Works, a coalition advocating for keeping benefits in place.

--Niv Elis contributed to this report, which was updated at 2:26 p.m.