"I've got about a 50-50 chance" of getting full projected Social Security benefits, estimates Jerry Emory of Humble, Texas, who turns 62 this year but plans to wait until he's closer to 65 to tap his benefits.
Created during the Depression, Social Security is the nation's most successful anti-poverty program, providing retirement, disability and survivor benefits to 50 million people. During the 1970s, Congress expanded benefits. In the 1980s, lawmakers fixed a financing crunch, in part by raising the eligible retirement age. In the 1990s, they raised taxes on benefits.
By 2017, Social Security is expected to start paying out more than it collects in payroll taxes. It faces a funding gap over the next 75 years of about 1.8% of taxable payroll. That gap could be addressed by raising taxes or cutting benefits by a like amount, CBO says.
Politicians have been mulling ideas to solve the problem, including a further retirement-age boost or a less-generous formula for calculating benefits, which would mainly hit younger workers. One presidential candidate, Sen. Barack Obama, D-Ill., has suggested boosting the amount of income subject to the Social Security payroll tax, now capped at $102,500. Republican hopeful Mike Huckabee might offer Americans a one-time tax-free buyout of their benefits and create private investment accounts.
But there are no guarantees.
"Just because you've started to receive benefits doesn't mean substantial changes won't affect you," Cori Uccello of the American Academy of Actuaries says of Social Security and Medicare. "If we wait too long to make changes, it may not be possible to grandfather people in under the old rules."
Boomers could suffer if Congress changes how Social Security cost-of-living increases are calculated or further raises taxes on benefits.
Medicare, which provides health care for 43 million elderly and disabled, is a much more urgent problem, as well as a trickier and more complex issue to address.
Orszag says significant savings might occur by better targeting payments to more cost-effective medical treatments.
"I'm an optimist," Orszag says. "There are opportunities to remove costs from the system without harming health care."
But the funding gap is so serious that there's no way to achieve a solution without affecting benefits or revenue. Changing how Medicare pays health providers could reduce spending. It could also prompt other changes in the broader health care system.
Past Medicare laws that set payment caps for some medical services led to parallel moves in private health plans. Similarly, steps by Congress to reform the broader health care system by moving toward government-mandated insurance or greater use of tax incentives could also affect Medicare.
"There are wide-ranging options," says Neuman of the Kaiser Family Foundation. "There are changes that could directly affect beneficiaries … providers, doctors, hospitals; there are changes that could affect insurers. And there are more structural changes" that could affect health care for all.
A solution to Social Security and Medicare will require Congress to muster a political will it hasn't shown recently. It will require tradeoffs between protecting those now on the rolls and ensuring fairness for younger adults paying into the programs.
"There's no one solution that's painless," Uccello says. "Whatever we do is going to require some shared burden on all the parties."