Meanwhile, higher benefit payouts mean Social Security will have to dip into its almost $3 trillion trust fund for the first time since 1982 - and trustees warned the program would be insolvent by 2034.
Medicare's trust fund pays for hospital visits, nursing care and related services under what's known as Part A of the program, which was created in 1965.
More than 60 million Americans benefit from both programs, which provide a guaranteed income and healthcare for many retirees and the disabled. The total annual cost of the OASDI program is projected to exceed total annual income in 2018 for the first time since 1982 and to remain higher throughout the 75-year projection period. Medicare Part B, which covers outpatient visits, and Part D, which pays for most prescription drugs, are paid for in part by general revenue and by individuals' premiums. Social Security and Medicare account for 42% of all federal spending.
The report from program trustees says Medicare will become insolvent in 2026, three years earlier than previously forecast.
President Donald Trump says he won't cut Social Security or Medicare, but hasn't offered a rescue plan for the long run.
"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", Mnuchin said in a statement on Tuesday.
"The historical reluctance of lawmakers to reduce benefits for current beneficiaries means that each successive year of delay excludes another large cohort of baby boomer retirees from contributing to the solution, thereby reducing the numbers of those among whom the burden of balancing system finances must be spread", the two former trustees warned.
The trustees report is considered an annual wake-up call for the beleaguered programs, though consensus around ways to secure their future remains elusive. Advocates for the elderly said today there should be no cuts to Social Security benefits. That's the amount the Social Security's trustees said tax income alone could cover.
Democrats want to expand the safety net by spending more on health care and education.
In principle, the U.S.is supposed to be paying forward its Social Security and Medicare obligations by building up trust funds to cover future costs.