Trustees warn of Social Security troubles Government trustees warned of a "concerning decline" in the financial health of Social Security, the US pension and disability programme, as they projected that the scheme's trust fund would be depleted in 2033, three years earlier than expected. The deterioration in the accounts of Social Security, driven by a combination of a weaker economy and higher energy prices, in 2011 produced the largest actuarial deficit since before 1983, when the programme was last overhauled under president Ronald Reagan. The sobering report will compound concerns about the inability of America's gridlocked political system to grapple with its biggest fiscal challenges, including the reform of the most costly government programmes. Democrats and Republicans in Congress have been unable to reach any agreement to stabilise the long-term finances of Social Security and Medicare, the health scheme for the elderly, amid election year attacks and fierce divisions on tax and spending policy. In their annual report released on Monday, government trustees said retirees could expect either a 25 per cent reduction in Social Security payments in 2033 or an increase in payroll taxes if the programme was not reformed. Meanwhile, the disability trust fund will be exhausted in 2016, two years earlier than previously projected, requiring even more urgent action. However, the financial health of Medicare, the medical scheme for seniors, was steady, with its trust fund expected to be depleted in 2024, unchanged from last year's projection. Still, the trustees warned that it too remained on an unsustainable path over the long-term amid rising costs. "Pressures on these programmes are mounting; Americans are living longer and the number of retirees are growing," said Tim Geithner, US Treasury secretary. It is critical that reforms are slowly phased in over time so current beneficiaries are not affected and future beneficiaries do not experience precipitous change. But Republicans, who presented a controversial plan to privatise Medicare to save money for the government last year, sought to depict the Obama administration as idle in the face of a looming fiscal crisis. "President Obama has offered no serious plan of his own, preferring instead to attack and point fingers over problems he refuses to address," said Lanhee Chen, policy director for the campaign of Mitt Romney, the presumptive Republican presidential nominee. Last year Mr Obama and John Boehner, speaker of the House of Representatives, came close to a deal that would have started to make meaningful changes to Medicare and Social Security. But the talks fell apart amid disagreements over the nature of the reforms and taxes. Most policy analysts and lawmakers are not expecting any progress on America's big fiscal dilemmas until after the November election. While Republicans have been aggressive in seeking to transform Medicare, they have been much more reluctant to take on Social Security, urging a bipartisan compromise rather than presenting their own plan that could be targeted by Democrats. Among the possible options mulled for improving Social Security's finances would be a change in the government's calculation of inflation to offer more modest cost-of-living adjustments. Others would involve an increase in the eligibility age and raising the limit on the payroll tax that funds the programme above its current level of $110,000 in wages.