Trustees' Report Previewed
March 19, 2004
The annual report of the Trustees for Medicare and Social Security due out next week will show that the programs need more than twice as much money as they had previously estimated, reports the New York Times.
The report, to be issued next Tuesday, includes the government's first effort to estimate the long-term cost of the prescription drug legislation that President Bush signed on Dec. 8, 2003. It will project costs on the basis of an "infinite horizon" that includes expected costs and revenues forever (discounted to the present), rather than just the next 75 years.
Last year, the Bush administration estimated that the long-term gap between the cost of promised benefits and the revenues to pay for them was $18 trillion over the next 75 years. The new report will show:
- The new Medicare program for prescription drugs could in itself cost up to $7 trillion over the next 75 years, and ultimately require more than $10 trillion.
- Social Security's unfunded obligations will amount to $10.5 trillion, or three times as much as the gap in the next 75 years.
- In all, the unfinanced promises of Social Security and Medicare are expected to total more than $50 trillion.
(The Trustees include four federal officials and two public members, John L. Palmer, dean of the Maxwell School of public policy at Syracuse University, and Thomas R. Saving, director of the Private Enterprise Research Center at Texas A&M University and a senior fellow with the National Center for Policy Analysis.)
Source: Edmund L. Andrews and Robert Pear, "Entitlement Costs Are Expected to Soar," New York Times, March 19, 2004.
For recent estimate, see Saving's NCPA study
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