Help Desperately Wanted As Medicare and Social Security Approach Insolvency

Key posts overseeing the financial health of Social Security and Medicare have been vacant for more than three years, leaving the programs without independent accountability in the face of dire predictions about approaching insolvency.

With Washington corroded by partisanship and consumed by political crises, gridlock has become the norm and hundreds of senior government jobs remain unfilled. For beneficiaries and taxpayers the lack of “public trustees” for Social Security and Medicare means a loss of outside supervision over bedrock middle-class programs.

Most Americans may not even realize there’s a role in government for public trustees of Social Security and Medicare, but insiders say the special advisers help keep annual financial reports honest by acting as a check on the ever-present temptation for political appointees to tweak the numbers.

“The public really doesn’t have a representative sitting at the table with the government officials, and I think that is concerning,” said Kathleen Sebelius, Health and Human Services secretary under President Barack Obama.

The public trustees — one Republican, one Democrat — are usually economists or retirement experts. They join four other trustees who are senior political appointees — the secretaries of the Treasury, Health and Human Services, and Labor departments, and the Social Security commissioner. Together they oversee annual financial reports and certify that the estimates are sound and unbiased.

Public trustees require Senate confirmation. Traditionally they are picked by the White House and the leadership of both parties, then nominated by the president. The White House has announced President Donald Trump’s intention to nominate former Social Security official James Lockhart to fill the Republican seat; Democrats say they’re working with the administration on a candidate.

Trustees serve for four years, and their terms can be extended. Toward the end of his administration, Obama re-nominated the incumbent public trustees for a second term. But with 2016 elections approaching, the Senate didn’t take a final vote and the posts have been vacant since.

This year’s Social Security and Medicare report found both programs in deteriorating health. The insolvency date for Medicare’s giant inpatient trust fund moved three years closer, to 2026. For Social Security, insolvency remained unchanged for 2034. But for the first time in 36 years, the cost of the retirement program was projected to exceed its annual income in 2018, meaning reserves will be tapped to pay benefits.

Nonetheless Treasury Secretary Steven Mnuchin was upbeat. “The programs remain secure,” said Mnuchin’s statement at the time.

“The administration’s economic agenda — tax cuts, regulatory reform, and improved trade agreements— will generate the long-term growth needed to help secure these programs and lead them to a more stable path,” he added.

Mike Leavitt, health secretary under President George W. Bush, says the absence of public trustees is a symptom of deeper problems with old-age programs that Americans do not want to face. “We have become desensitized,” said Leavitt.

Public trustees fulfill “a piercing and profound purpose” as “knowledgeable private citizens empowered with information to make a declaration to their fellow citizens,” he added.

Several former public trustees said they were generally able to set aside ideological differences while working with career staff at Social Security and Medicare to validate long-range financial estimates.

Those estimates are built from moving parts such as economic growth, life expectancy, hospital costs, births, immigration, disability rates and the introduction of new drugs and technologies. Social Security and Medicare combined account for nearly 40 percent of the federal budget. Social Security has more than 60 million beneficiaries, and about 60 million people are covered by Medicare.

Economist Marilyn Moon, a Democratic public trustee under President Bill Clinton, said she was involved in “pushing back pretty hard on some political appointees who wanted to make a political statement.”

Ultimately the only leverage public trustees have is to withhold their signatures from the final report.

Without public trustees, professionals at Social Security and Medicare are loath to make changes in assumptions underlying the financial estimates. That means those estimates can get out-of-date, said Rick Foster, Medicare’s former chief actuary, or top number-cruncher. “The process can get a little stale,” he said.

Economist Robert Reischauer, the Democratic public trustee on the 2011-2015 reports, said, “The closer we get to the cliff with these two programs, the more critical these positions and the integrity of the process become.”

Stephen Kellison, the Republican public trustee on the 1996-2000 reports, said Americans are being deprived of a valuable perspective on programs they cherish.

“There’s going to be a hard landing, and I don’t have any confidence the way Congress works today that either party can solve the problem,” Kellison said. “Could the public trustees be helpful? We probably need them now more than ever.”

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