The following excerpt is from the Office of Management and Budget at
http://www.whitehouse.gov/omb/budget/fy2004/danger.htmlIt projects huge shortfalls in the funding of Social Security and Medicare in the future (75 years).
Do you think Social Security and Medicare are in trouble? If so what should be done about it?
THE REAL FISCAL DANGER
The current system is financially unsustainable. Without reform, the promise of Social Security to future retirees cannot be met without eventual resort to benefit cuts, tax increases, or massive borrowing. The time to act is now.
Interim Report of the President’s Commission to Strengthen Social Security
August, 2001
Without meaningful reform, the long-term financial outlook for Medicare is bleak...When viewed from the perspective of the entire budget and the economy, the growth in Medicare spending will become progressively unsustainable over the longer term.
David Walker, Comptroller General of the United States
April 7, 2002
As noted frequently in this document, the federal government appears likely to spend more than it takes in for at least the next few years. Although the resulting deficits are manageable by any reasonable standard, they are cause for legitimate concern and attention. But whatever judgment one reaches about the deficit of this year or even the next several years combined, these deficits are tiny compared to the far larger built-in deficits that will be generated by structural problems in our largest entitlement programs. Social Security and Medicare combine to provide financial support to 39 million seniors—14 percent of our population—and account for one-third of total federal spending. As our population ages and health care costs continue to escalate, the costs of these programs will grow enormously, in fact, so rapidly that they will threaten to overwhelm the rest of the budget.
Americans have often heard that Social Security and Medicare are in deep trouble financially, and the simple reason is that the benefits promised under these programs will soon far outstrip their dedicated revenues. Over the long term, the actuaries of the Social Security Administration project that the cost of all benefits paid to current beneficiaries and promised to future retirees exceed Social Security revenues by almost $5 trillion. The Medicare shortfall is even worse at more than $13 trillion.
