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Donald Trump wrongly says Social Security and Medicare are stronger
President Donald Trump is rejecting the image of policy chaos and bitter staff infighting captured in the latest book by Washington Post editor Bob Woodward.
At a meeting with Kuwait’s leader Sheikh Al-Sabah, Trump called the book "fiction" and said in contrast to what it describes, no administration has gotten more done on tax cuts, deregulation and the courts than his. And the accomplishments don’t end there.
"We’re saving Medicare," Trump said Sept. 5. "The Democrats want to destroy Medicare. If you look at what they’re doing, they’re going to destroy Medicare. And we will save it. We will keep it going. We’re making it stronger. We’re making Social Security stronger. We’re making our whole country stronger. So all you have to do is look at the achievements."
In this fact-check, we look at whether the Trump administration has made Medicare and Social Security stronger.
Compared with estimates a year ago, the primary trust fund for Medicare runs out three years sooner.
The primary trust fund for Social Security runs out one year sooner.
The Republican tax cuts trimmed a year of solvency from the primary Medicare trust fund and had a negative effect on the Social Security trust fund.
Medicare serves almost one out of six Americans. It’s primarily health insurance for people 65 and older, but it also helps millions of citizens with disabilities.
Medicare’s core program, Part A, covers hospital care, and it’s an entitlement. Anyone who qualifies gets the coverage and the government funding is automatic, not subject to the annual budget decisions of Congress.
The money for Part A comes out of the Hospital Insurance Trust Fund. Payroll taxes provide about 90 percent of the trust fund’s income. Coming in a distant second are taxes on wealthier Social Security recipients, which provide about 8 percent of total revenues.
In their 2018 report, the Medicare Trustees forecast that fund would run out of money in 2026. A year earlier, they said it would last until 2029. On Trump’s watch, it lost three years of solvency.
In a presentation at the American Enterprise Institute, a market-oriented think tank, the chief actuary at the Centers for Medicare and Medicaid Services Paul Spitalnic said two of the lost years were due to lower than expected wage growth.
But the other lost year came from the Republican tax cuts.
"The Tax Cuts and Jobs Act of 2017 decreased individual tax rates and as a result, there is somewhat less income coming into the trust fund," Spitalnic said. "That does have an effect of making depletion of the trust fund a year earlier."
The tax cut law had a similar impact on Social Security. Social Security has two parts -- the Old Age and Survivors Trust Fund, which served 51 million people in 2017, and the Disability Trust Fund, which served 10 million. According to the 2018 Social Security Trustees report, the total price tag in 2017 was $952 billion.
The Old Age and Survivors fund is the big one for retired people, with about $2.8 trillion. The Disability fund had $71 billion at the end of 2017.
With costs rising faster than income, the larger fund is expected to run dry in 2034. A year earlier, the projection was for 2035. So that’s a loss of one year of solvency.
The trustees listed several factors for the worsening situation, including the tax cut law, the expected end of DACA (Deferred Action for Childhood Arrivals, an immigration program Trump opposes), and lower-than-expected wage increases. All three reduced the dollars coming into the trust fund.
The one bright spot was with the Disability Insurance Trust Fund. While by far the smaller of the two, its projected solvency date was extended by four years, driven by a fall in the number of people claiming benefits.
White House staff noted that the economy is growing and growth helps Social Security and Medicare. Treasury Secretary Steven Mnuchin said the same when the latest trustees reports came out in June.
Not all economists agree that growth will solve all. The Committee for a Responsible Federal Budget, a deficit control group, argues that growth leads to higher prices, which in turn increases program costs.
The White House also said payroll contributions are up since last year. But unless revenues come in faster than outlays, the trust funds continue to lose ground.
We asked Olivia Mitchell, a professor and leading analyst of social insurance funds at the University of Pennsylvania’s Wharton School, how she would assess the status of Social Security and Medicare.
"Trump’s administration has done nothing to strengthen Social Security or Medicare," Mitchell said.
Health policy professor Paul Ginsburg with the University of Southern California and the Brookings Institution told us that he’s hard pressed to remember a tax bill that left the Medicare trust fund worse off.
"The recent change, where legislation moved the date forward, is very unusual and reflects the unusual and dangerous mindset in Congress of not caring about increases in the deficit," Ginsburg said.
Trump said that his administration is making Medicare and Social Security stronger. The forecast for both programs is worse today than a year ago. The main Medicare trust fund is expected to run out of money three years sooner. The main Social Security trust fund is expected to run out one year sooner.
The Republican tax cut law and lower-than-projected wages accounted for most of the downgrade.
We rate this claim False.
Donald Trump, Remarks by President Trump and Amir Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah of the State of Kuwait Before Bilateral Meeting, Sept. 5, 2018
Social Security Administration, The 2018 OASDI Trustees Report, June 5, 2018
Medicare Trustees, Medicare amendments since the 2017 report, June 5, 2018
Medicare Trustees, 2018 report, June 5, 2018
American Enterprise Institute, The 2018 Medicare Trustees Report: Fiscal challenges and future reforms, June 6, 2018
Committee for a Responsible Federal Budget, Analysis of the 2018 Medicare Trustees' Report, June 7, 2018
U.S. Treasury Department, Statement by Secretary Mnuchin on the Spring 2018 Meeting of the Social Security and Medicare Board of Trustees, June 5, 2018
American Academy of Actuaries, Making issues count - Medicare, 2018
Tax Policy Center, What is the Medicare trust fund, and how is it financed?, 2016
Committee for a Responsible Federal Budget, Can We Grow Our Way Out of Debt?, Aug. 5, 2015
Interview, Paul Ginsburg, director, USC-Brookings Schaeffer Initiative for Health Policy, Sept. 6, 2018
Email interview, Olivia S. Mitchell, professor of business economics and public policy, University of Pennsylvania Wharton School, Sept. 6, 2018
Email interview, Samir Soneji, associate professor, Dartmouth Institute, Sept. 6, 2018
Email interview, Lindsay Walters, deputy press secretary, White House, Sept. 6, 2018
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