Social Security, Medicare Threatened as Birth Rate Hits 32-Year Low

The National Center for Health Statistics at the U.S. Centers for Disease Control and Prevention estimated that the American birth rate reached its lowest point in 32 years in 2018, which could have serious ramifications for Social Security and Medicare, reports Yahoo! Finance . Approximately 3.79 million babies were born in the United States last year — a 2 percent decline year over year — and the fertility rate remained below the replacement level to maintain the national population at current levels. The U.S. Census Bureau has forecast that 20 percent of U.S. citizens will be 65 or older by 2030, while population growth should decelerate substantially between 2017 and 2060. This will likely place a greater financial strain on social programs that rely on workers paying into them through income taxes to support older Americans. "All past projections of the proportion of the U.S. population that will be seniors, and eligible for Medicare and Social Security, have assumed that the previous higher birth rates remained constant," said Columbia University Professor John Rowe. "As rates have fallen, and fewer young people ultimately enter the labor force and pay into the Social Security and Medicare Trust funds, the solvency of these funds is threatened." An earlier Social Security and Medicare trustees report warned the programs' reserves are expected to be emptied in 2035, when just 80 percent of benefits will be payable. Meanwhile, Medicare's hospital insurance trust fund is expected to be depleted by 2026.