Depletion Date of Social Security and Medicare Trust Fund Extended
[author:Lala C. Ballatan Public time:May 14, 2007] |
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Trustees of the Social Security and Medicare programs announced yesterday, May 13, 2007 that the estimated exhaustion of both programs’ trust was extended for a year later than previous estimates. The Social Security’s trust fund will be exhausted in 2041 while the Medicare’s trust fund is expected to deplete in 2019.
Los Angeles, California, May 14, 2007 – Social Security and Medicare trust funds will not yet be depleted until 2041 and 2019, respectively. This was the statement of the two programs’ trustees last Monday, May 8, 2007 at Washington during their annual report of the financial status of these two biggest benefit programs of the government. These recent estimates are a year later than previous estimates by the trustees.
According to the trustees, the dates of estimated exhaustion of funds were extended due to the minor reductions in projected benefits and somewhat higher tax collections.
Still, even if with these minimal changes, the trustees are resolved in their declaration that the Social Security and Medicare Programs remain beset with serious financial predicaments, especially with the coming retirement of over 78 million baby boomers in the year 2018.
Medicare is already on dire financial situation. Right after the first report by the trustees about the two biggest government program funds’ depletion, it set off a Medicare funding warning. This required President George W. Bush to submit a proposal to trim down Medicare costs, early next year.
The Medicare funding warning started when the reports of the Social Security and Medicare’s trustees reach the conclusion that financing Medicare required a general revenue amount to compose over 45% of the program’s outlay. The trustees also made these estimates last year.
Accordingly, President Bush needs to propose counteractive action measures during the first few months of the coming year. Meanwhile, there is a need for Congress to recognize such proposals. There is no requirement for them, however, to act on these proposals.
Senior citizens’ lobbying groups have already complained about the Medicare funding warning, included in the Medicare on 2003, together with the passage of the prescription drug benefit.
According to these lobbying groups, there is no harm if Medicare is to receive at least 45 percent of its funding from general revenue as much as there is no harm for the other government programs to be rewarded with 100 percent general revenue funding. Compared to the other government programs, Medicare has other sources of funding. These are through payroll taxes and insurance premiums.
Issues regarding Social Security and Medicare continue to escalate as reports from the trustees become worrisome.
Adding more to the disputes is President Bush’s proposal in 2005 to create personal savings accounts for the present generation’s younger workers as an answer to the funding shortfall of the Social Security as foreseen. Bush’s proposal is part of his statement to make an ov
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