Sometimes I Feel Like a Piece of Bologna

Tuesday, May 01, 2007

Medicare and Social Security in Trouble

According to the Washington Times, the results of the annual Social Security and Medicare Trustees report released this week are not good. The government's will is once again bigger than its wallet. The report shows an unfunded liability in Social Security and Medicare over the next 75 years at $51.7 trillion.

According to John Goodman, president of the National Center for Policy Analysis, "In just five years, these two programs will require 10 percent of other federal revenues. That means in five years the federal government will have to stop doing about one in every 10 non-entitlement things it has been doing in order to balance the budget and keep its promises to the elderly."

Although the Bush administration has emphasized Social Security reform, the reality is that Medicare is in worse shape. Medicare expenditures are expected to reach $483 billion this year, making it the second-largest government expense behind the Defense Department.

According to the article, “Medicare costs are at the mercy of a two-headed monster. A ballooning price tag for medical care will be coupled with an explosion in the number of retirees with 76 million members of the baby boom generation moving closer to becoming eligible for benefits. Combined, those forces will overwhelm the Medicare program by 2019, while Social Security is slated to run out of money by 2041.”

The crisis “has been exacerbated by the addition of the new prescription benefit," said John Palmer, an economics professor at Syracuse University and a public trustee. "The challenge here has been understated."

Under a law passed in 2003, President Bush must propose a strategy to address the program's fiscal crisis when he submits his 2009 budget and Congress must immediately consider the proposal, but neither the president nor Congress is expeted to pass a new law.

U.S. Senators Chuck Hagel (R-NE), Jim Webb (D-VA), and Representatives John Tanner (D-TN) and Mike Castle (R-DE) reintroduced legislation in the Senate and House this week to create a Comprehensive Entitlement Reform Commission. The commission would review Social Security, Medicare and Medicaid and make recommendations to Congress that would sustain the solvency and stability of these three programs for future generations.

Medicare has increased US health care expenditures from its inception. The likelihood that there will be benefits available when we boomers reach retirement age is slim. And unless politicians are willing to bite the bullet and make major changes, the entire system will collapse on itself. And yet, the clamor for universal health coverage or extending Medicare to everyone continues unabated. When will we ever learn?

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1 comment(s):

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