Social Security and Medicare are two of the most important social safety net programs in the United States, providing essential financial support to millions of Americans. However, both programs face significant challenges in the coming years, including rising costs and declining trust funds.

Social Security, which provides retirement, disability, and survivor benefits to workers and their families, is projected to exhaust its trust funds by 2035. This means that without changes to the program, beneficiaries could see a reduction in benefits of up to 21% starting in 2036. To address this shortfall, policymakers have proposed various solutions, such as increasing the payroll tax rate, raising the cap on earnings subject to the payroll tax, or adjusting the formula used to calculate cost-of-living adjustments.

Medicare, which provides health insurance coverage to seniors and certain disabled individuals, also faces financial challenges. The Hospital Insurance (Part A) trust fund is expected to be depleted by 2024, at which point the program will rely solely on incoming premiums and general revenue to cover expenses. This could lead to reduced provider reimbursement rates, higher out-of-pocket costs for beneficiaries, or lower enrollment levels. To shore up Medicare's finances, lawmakers may consider measures such as increasing the eligibility age, modifying benefit structures, or implementing cost-saving reforms to reduce wasteful spending.