The Obama administration reported Tuesday that the financial condition of the two largest federal benefit programs, Medicare and Social Security, had deteriorated, in part because of the recession.
The administration said the Medicare fund is expected to run out of money in 2017, two years sooner than projected last year. The Social Security “trust fund” will be exhausted in 2037, four years earlier than it predicted. (see graph below)
Lawmakers have long said that they would never allow Medicare’s trust fund to run out of money, but with numbers like this it’s hard to believe that they can do anything to stop it from happening.
The projected date of insolvency, a widely used measure of the benefit programs’ financial health, shows the immense difficulties Mr. Obama and Congress will face in trying to shore them up while also extending health coverage to millions of Americans. The fact that 5.7 million jobs have been lost since the recession began isn’t helping since with fewer people working, the government collects less in payroll taxes, a major source of financing for Medicare and Social Security.
The Treasury secretary, Timothy F. Geithner, said the only way to keep Medicare solvent was to “control runaway growth in both public and private health care expenditures.” And he said Mr. Obama intended to do that as part of his plan to guarantee access to health insurance for all Americans.
