Medicare to exhaust funds sooner, report finds

WASHINGTON Fri May 13, 2011 12:22pm EDT

Vice President Joe Biden hosts a meeting with congressional Republicans and Democrats at Blair House, May 5, 2011. REUTERS/Jason Reed

Vice President Joe Biden hosts a meeting with congressional Republicans and Democrats at Blair House, May 5, 2011.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - Two of the government's most popular programs for the elderly, Medicare and Social Security, will run out of money sooner than thought earlier as a slow-growing economy saps revenues, a report on Friday said.

Trustees for the two funds said the Medicare trust fund is projected to exhaust its funds in 2024, not 2029 as estimated last year, and that the Social Security retirement program will run out of money in 2036, not 2037 as previously thought.

The latest projections hit in the middle of an intense debate between the Obama administration and opposition Republicans about how to rein in the nation's runaway debt, set to hit the legal limit of $14.3 trillion on Monday.

Whether the two costly entitlement programs should be on the table has been an intense subject of debate.

Ahead of the report's release, Representative Xavier Becerra, the top Democrat on the House Ways and Means Subcommittee on Social Security, said he expected it to show that slow economic growth has hit everyone hard, including Social Security.

But he said program, which was providing benefits to nearly 60 million Americans at the end of last year, should not be brought into the current debate over the 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," he said in an interview.

So far, Social Security appears to be off the table in the budget talks. But Republicans in the House of Representatives are pushing to overhaul the Medicare healthcare program for future retirees. Their proposal would give the elderly a federal subsidy to purchase medical coverage from private insurers.

Republicans argue the change is needed because a recent analysis by the nonpartisan Congressional Budget Office shows the trust fund will be depleted in nine years.

Michelle Dimarob, spokeswoman for Republican Ways and Means Committee Chairman Dave Camp, anticipated the trustees' report would show the recession putting a strain on the finances of both programs.

"We have got to demonstrate that we are serious about shoring up these entitlement programs," she said.

(Reporting by Glenn Somerville, Pedro Dacosta and Donna Smith; editing by Neil Stempleman)

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Comments (19)
ExRepublican2 wrote:
The Republicans at trying to elimate Medicare!!! Wealthy people have lost sight how to energize the economy. Example: Donald Trump avers (view his Comedy Central roasting; to have 7 Billion Dollars and if he would just spend one billion back into the economy. Bill Gates, who has 92 Billion Dollars could spend 5 Billion dollars back into the economy, Warren Buffet, who has 47 Billion Dollars spend five billion back into the economy and there are countless other billionaires, millionaires who could spend billions or millions back into the economy. Those dollar amounts wouldn’t affect them at all. But they won’t do it, because they have to make money investing it instead. Another example: CEOs who would rather accept a 5 to 25 million dollar bonus instead of using that money to save their employee’s jobs. You see America, the wealthy are not in it for the working class, but would rather lay you off and accept their bonuses. The economy would recover if only ‘all of the wealthy people’ started spending some of their wealth. God knows the middleclass doesn’t have enough money to spend any more, so the Republicans are trying to fine money elsewhere. It’s like your employer, who gives you a pay raise for 3 years, then doesn’t for four years or cuts your 40 hr work week down to 35 hrs, thus nullifying your pay raise. The wealthy will scheme money from anyone that they can, because they don’t want to pay their fair share of taxes.

May 13, 2011 1:47am EDT  --  Report as abuse
affableman wrote:
Lift the $100,000 cap on taxable earnings and that fixes Medicare long-term. As for Social Security, means test it. If you’re rich enough then you don’t need it.

If you buy what the Republicans are selling, privatization, snake oil, cuts, cuts and more cuts then I’ve got a bridge to sell ya’.

May 13, 2011 2:04am EDT  --  Report as abuse
sandman839 wrote:
Giving the top 6% tax brakes is what is causing the problem. Once you make over a certain amount you no longer pay into either account, but you can collect full benies no matter how much you make if it is not income, but dividends. Make it so that if you make over a certain amount either by income or any other source you don’t get any thing. The ones who have the money to pay wont and the ones who are willing to can’t.

May 13, 2011 2:37am EDT  --  Report as abuse
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