TIME WORKS AGAINST CANDIDATES ON SOCIAL SECURITY, MEDICARE FIXES
October 14, 2008
Social Security and Medicare long have been considered the nation's fiscal time bombs, and the ticking is getting louder. But presidential candidates Barack Obama and John McCain have no comprehensive plans to overhaul the systems, and are campaigning almost as if they don't notice them, say observers.
- Medicare faces insolvency by 2019; Social Security is projected to be spending more than it's collecting in taxes by 2017.
- Yet both Obama and McCain offer only minor fixes -- and few specifics even about the modest ideas they do float.
Bigger, bolder, more sweeping approaches are needed, and fast, say the experts.
"They're not preparing the country for sacrifice," said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan budget watchdog group.
Time works against both candidates, say observers:
- Beginning in 2011, the first wave of baby boomers -- Americans born between 1946 and 1964 -- will reach official retirement age.
- From that point forward, the federal government's finances will be strained, as more and more Americans retire expecting a shrinking number of active workers to pay their promised health and pension benefits.
To put it more starkly:
- Medicare's trustees project the hospital insurance fund will become insolvent in about 10 years, as its expenditures grow at a 7.4 percent annual rate.
- The government, the trustees said, will need $342 billion to cover insurance costs during that period.
Social Security is in better shape, but has its own daunting challenges. While it isn't projected to exhaust its resources until 2041, its tax revenue is expected to fall behind outlays beginning in 2017, the trustees said.
The next president will be under pressure to stabilize funding for the two programs.
"The longer action on reforming health care and Social Security is delayed, the more painful and difficult the choices will become," said a Government Accountability Office study in June. "The federal government faces increasing pressures, yet a shrinking window of opportunity for phasing in adjustments."
Source: David Lightman and Kevin G. Hall, "Time works against candidates on Social Security, Medicare fixes," McClatchy Newspapers, October 10, 2008.
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