Trustees: Social Security, Medicare Closer To Insolvency
BREAKING NEWS
Trustees: Social Security, Medicare Closer To Insolvency
Tuesday, May 12, 2009
The recession has moved both Social Security and Medicare closer to crisis and insolvency, according to a report by trustees for the entitlement programs. The trustees reported this afternoon that the Medicare trust fund will be depleted by 2017 -- two years earlier than they projected last year.
by George E. Condon Jr.
Tuesday, May 12, 2009
Investor's Business Daily -
ż1 hour agoż
Entitlements: A report on
Social Security and
Medicare holds some grim news: Not only are the programs going bust, but they'll run out of money sooner than
...
Report: Recession hits Social Security, Medicare USA Today
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SunHerald.com (press release) -
ż2 hours agoż
Trust Funds
Closer to Depletion According to Latest Projections WASHINGTON, May 12 /PRNewswire-USNewswire/ -- The 2009
Social Security and
Medicare ...
Apocalypse When?
Posted 07:23 PM ET
Entitlements: A report on Social Security and Medicare holds some grim news: Not only are the programs going bust, but they'll run out of money sooner than expected. The crisis we've been warned about for years is here.
Baby boomers that 70-million-strong population lump begin officially retiring this year. That means the government's bill for retirees' pensions and health care has no where to go but up, for decades to come.
Everyone knew this day would come. And virtually every economist and actuary who had run the numbers could tell you, within a few years' certainty, the system was going bankrupt.
But all this seemed to happen in the distant future. Last year, both political parties virtually ignored the topic during their presidential campaigns. It became a non-issue issue.
Well, thanks to a profligate federal government, which will double the national debt to $11.5 trillion in just four years, and a recession that has weakened federal tax revenues, we can no longer ignore the problem. The day of reckoning is at hand.
The Social Security Board of Trustees reported Tuesday that costs will exceed revenues in 2016 a full year sooner than expected just last year. And total assets including more than 70 years of "surpluses" built up in the "trust fund" will be completely gone by 2037 four years earlier than in last year's report.
The deficit over the next 50 years is expected to be about 2% of taxable payrolls up from 1.7% last year. By the way, changes in the last year alone have added $5.3 trillion in costs to the program.
Long-term, unfunded liabilities for Social Security and Medicare top $53 trillion about four times the size of current GDP. Taxes must either rise or benefits shrink by that amount to close that gap.
"We should be neither casual nor hysterical about the revised insolvency dates," said Michael Astrue, commissioner of Social Security. "As with the economy as a whole, the Social Security system will weather this recession."
With all due respect, a little hysteria might be the best strategy right now. Fact is, the long-term outlook is made much worse by the recession. And the problems of Social Security and Medicare are structural requiring a massive, root-and-branch reform that Washington seems unwilling to do.
Social Security should have been reformed a long time ago. When President Bush put private accounts on the agenda in a very minor way in 2004, he was roundly criticized. Congress did nothing on either side of the aisle.
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