Gross Domestic Product

Annual report delivers sobering news concerning Social Security, Medicare

Just in time for the upcoming anniversary of the Social Security Act of 1935, the 2017 Annual Report of the Social Security and Medicare Board Trustees is out; and, once again, the news is sobering.

According to a summary of the report, "Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing." Additionally, the debate over health care has put Medicaid in the spotlight, so it's time for a Q&A on three of the largest components of the federal budget, which account for about $2.4 trillion of spending.

Q: How is Social Security funded?

A: It's a pay-as-you-go system, funded by payroll taxes (the...