RECESSION HURTS MEDICARE AND SOCIAL SECURITY
May 13, 2009
The U.S. Social Security and Medicare retirement and health programs for the elderly will run short of funds sooner than previously thought because the recession has taken a toll on tax revenues, a government report released on Tuesday showed.
According to the Social Security and Medicare Trustees:
- The Social Security trust fund will be exhausted by 2037, four years earlier than previously estimated.
- The Medicare hospital trust fund will become insolvent by 2017, two years earlier than estimated.
Labor Secretary Hilda Solis said that "the dual effect of the economy and unemployment has produced a downward pressure on the financial security" of the Social Security program.
- The latest report said Medicare's financial problems are more severe than those facing Social Security because of rapidly rising health-care costs.
- For years lawmakers have been concerned about the long term financing of the two programs as the 77 million strong baby boom generation retires.
Sen. Charles Grassley, the top Republican on the Senate Finance Committee which is helping write health care legislation, said the report shows the danger of creating a new government health insurance plan that some Democrats want to help provide medical coverage to an estimated 46 million uninsured Americans.
"When we can't afford the public health plan we have already, does it make sense to add more?" asks Grassley.
Source: Donna Smith, "Recession hurts Medicare and Social Security," Reuters, May 13, 2009.
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