Politics

Financing for Government is Looking Worse

By BRIAN KNOWLTON
NYT
WASHINGTON ? The financial outlook for Medicare and Social Security has significantly worsened, as the bad economy and mounting job losses have pushed both programs years closer to insolvency, according to a grim report issued Tuesday by the Obama administration.

The new projection, in an annual report from the programs? trustees, says that Medicare?s hospital insurance trust fund will be exhausted in 2017, just a year after President Obama would leave office if re-elected to a second term. Last year the trustees said they expected the fund to last until 2019.

The trustees also said that Social Security?s reserves now face depletion in 2037, four years sooner than the previous projection of 2041. The projections assume that there are no changes in current benefits, policies and tax rates.

The two programs, which serve more than 50 million people, are caught in a difficult dynamic linked largely to the recession: Millions fewer people are working and paying the taxes that support the programs; yet health care costs are continuing to soar, millions of baby boomers have begun receiving Social Security retirement benefits, and Americans are living longer.

Full post as published by Mike Conaway's Blog on May 12, 2009 (boomark / email).