Economy Weakens Medicare
The US governments two biggest elderly programs — Medicare and Social Security — will run dry sooner than previously predicted as a slow-growing economy saps revenues, according to a report released on Friday.
The Medicare trust fund is projected to run out of money sometime in 2024, five years earlier than last year’s estimate of 2029. Trustees also projected that Social Security will exhaust its funds in 2036, rather than 2037.
The new projections come amid intense debate between Republicans and the Obama administration about how to stop and reverse the national debt, which will hit $14.3 trillion on Monday, considered the legal limit.
Ahead of the release of the report, Representative Xavier Becerra, the top Democrat on the House Ways and Means Subcommittee on Social Security, said he expects it to show that slow economic growth has hit everyone hard.
But the program, which provides benefits to nearly 60 million Americans, should not be brought into the debate over the national deficit.
“There is a growing consensus that Social Security has never contributed a penny to national debt and is not an appropriate target for deficit reduction,” Becerra told Reuters in an interview.
For now, Social Security remains not included in budget talks. But Republicans in the House of Representatives are pushing to overhaul the Medicare healthcare program for future retirees. The proposal calls for giving the elderly a federal subsidy to purchase medical coverage from private insurance agencies.
Republicans said the change is needed because recent analysis by the Congressional Budget Office shows the trust fund will be depleted in nine years.
The trustees’ report would show the recession putting a strain on the finances of both Medicare and Social Security, said Michelle Dimarob, spokeswoman for Republican Ways and Means Committee Chairman Dave Camp.
“We have got to demonstrate that we are serious about shoring up these entitlement programs,” said Dimarob.
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