The U.S. budget is going deeper and deeper into debt and unfortunately, the core of the problem is Social Security and Medicare. There are millions of Americans who rely on these programs and changes need to be made soon, to ensure that the program is sustained.
A Budget Deep in the Red
The 2025 government budget shows a grim picture. The budget shows approximately about $7 trillion in spending and $5 trillion in taxes. That leaves nearly $2 trillion borrowed in a single year just to keep the government running.
More than $5 trillion of this money is spent on programs such as Social Security and Medicare.
For instance, the recent “One Big Beautiful Bill Act” reduced expenditure by $1 trillion while simultaneously lowering taxes by $4.5 trillion. When interest expenses are taken into account, the debt has increased by more than $4 trillion.
Social Security: The Biggest Warning Sign
According to the latest Social Security Trustees report, the programs trust funds are running out of money. If no changes are made, the program could run dry by 2034. This would lead to a significant cut in benefits. Social Security will only be able to pay about 75% of promised benefits.
For retirees, those with disabilities, and families that depend on survivor benefits, that would entail automatic reductions. Those cuts might be the difference between security and poverty for millions of Americans, particularly those who rely solely on Social Security.
Why It Matters for Everyday Americans
It is important to note that Social Security is a lifeline for millions of Americans. Approximately 2/3 seniors depend on Social Security for more than half of their income and for 1/4 people, this is their primary source of income.
If benefits are cut, the impact will be immediate and severe:
- All those who depend on Social Security for rent and utilities, may face difficulties in paying for their homes.
- Disabled workers could struggle to cover basic medical expenses.
- Families relying on survivor benefits may struggle financially.
Financial experts emphasize that this is something that people rely on to put a roof over their heads and food on the table.
What Options Are on the Table
The report stresses that the longer Congress waits, the harder it will be to fix the problem. Some potential solutions include:
- By raising the retirement age, this would mean that people have to work a few more years before claiming benefits. This might spark debate amongst many but is an option to consider.
- Increasing payroll taxes. Workers and employers could be asked to pay a little more into the system.
- Raising the income limit. At the moment, Social Security taxes solely on salaries up to a specific threshold. Increased income from high incomes would result from raising or lowering that ceiling.
- For those individuals who are wealthier, officials could consider reducing benefits.
None of these choices are easy, but experts say some combination will likely be necessary to keep the program strong.
The Bottom Line
The country’s financial situation is tied to the long-term future of Social Security and Medicare. Unfortunately, if no changes are made, the debt will continue to grow, and Social Security benefits may be cut in the future.
Sadly, even though it isn’t supposed to be like this, there are millions of people who rely on Social Security for rent, utilities and food. It is important for people to consider other retirement savings options and not rely solely on Social Security. Beneficiaries are also urged to look into other support programs apart from just Medicare as well.