Entitled to help: Medicare and Social Security need a rescue
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Barack Obama's list of presidential trials just grew by two. The government's annual reports on Medicare and Social Security show the funds for both running out earlier than previously estimated.
For Medicare it is two years sooner, in 2017 rather than 2019. For Social Security it is 2037 instead of 2041. In both cases the earlier expiration date was attributed to the recession, the fact that greater unemployment is costing both funds tax revenue. Social Security is the main source of income for more than half of older Americans, and Medicare provides health care for about 45 million beneficiaries.
Making matters worse is the fact that the retirement of America's baby boom generation, which has begun, will add millions of recipients to both Medicare and Social Security.
The only source of comfort is that, if former President George W. Bush had had his way, Social Security would have been privatized, leaving its trust fund vulnerable to the disastrous plunge in the financial market, which has already slashed Americans' private savings.
Possible remedies to the deteriorating funds include tax increases to save Social Security and higher premiums, co-pays and deductibles for Medicare.
Americans have had various reactions to reports of the decline of Social Security and Medicare. One is resignation and the feeling that "I knew they were going to do that," reflecting cynicism about government promises. Another reaction, often made through clenched teeth, is "Congress wouldn't dare let Medicare or Social Security run out of money." The idea is that Congress knows that voters being cheated out of either program could spell rage at the ballot box.
One way to help Medicare is to push the reform of America's general health care, as President Obama has urged, with emphasis on removing excess profits and wasted resources. Cuts in military spending are another way to free up money.
In any case, Tuesday's adverse reports lend urgency to the reform of the U.S. health and retirement systems and rattle the nerves of the many Americans who depend on these programs.
First Published May 14, 2009 12:00 am