"Protecting Social Security and Medicare is one of the most significant challenges we face today as a nation," Treasury Secretary Jack Lew said Friday during a discussion of the report in Washington. "And it is a challenge we can and must meet."
A more immediate concern, however, is the projected insolvency of Social Security's disability trust fund in 2016, said several speakers, including Carolyn Colvin, acting commissioner of the Social Security Administration, at the presentation.
If Congress does nothing, payments from the disability fund would be at 80 percent of program costs once the insolvency threshold is breached, Colvin said, while noting most of the focus was on the insolvency projection for the combined Social Security funds.
"People not able to work depend on this benefit," she said. "It is our hope that Congress will make the necessary legislative changes before we reach the critical point of 2016."
Chuck Blahous, a Social Security and Medicare public trustee called the potential insolvency of the disability trust fund an "immediate challenge."
The report said Social Security wouldn't be able to pay full benefits to retirees after 2033, lowering the benefits to three-quarters after the projected insolvency date.
Medicare's trust fund will be insolvent in 2026, two years later than estimated last year. Health and Human Services Secretary Kathleen Sebelius said the projected extension was because of lower-than-expected Medicare spending.
She said the report confirmed the Affordable Care Act, President Barack Obama's signature healthcare reform initiative, "continues to strengthen Medicare and ensure its solvency" in the future.
The 2026 insolvency date means the fund for Medicare's hospital benefit will begin to spend more money than it receives.
The report concluded a slowdown of growth in healthcare costs contributed to the projected life of the Medicare trust fund being extended two years to 2026.
The report said The Affordable Care Act -- including limits it imposed on Medicare Advantage -- is partly responsible for the slower growth of healthcare costs, and noted the projected life of the trust fund has grown by nine years since the ACA was enacted. It said a combination of lower costs throughout the healthcare industry and reduced usage of healthcare services, also contributed to the trend, The Washington Post reported.
Lew said this year's projections were essentially unchanged from last year's report, with the exception of Medicare.
"The Medicare report demonstrates, once again, the importance of the Affordable Care Act, which has strengthened Medicare's finances by reining in health care costs," Lew said. "The healthcare law has also helped extend the life of the Medicare Hospital Insurance Trust Fund."
Blahous, a deputy national economic council director for former President George W. Bush, said it was "getting to be late in the game" for Congress to act.
Robert Reischauer, another Social Security and Medicare public trustee, said both programs are on an "unsustainable path."
"The sooner decisions made, the greater the opportunity [to] craft solutions that are balanced and equitable," he said.
Lew said Obama was determined "to work on a bipartisan basis to put Social Security and Medicare on a stronger footing."