Medicare, Social Security finance check
Today, trustees for Social Security and Medicare are expected to announce their annual financial report. Experts say the report will show the financial health for both programs is slipping. Jeremy Hobson reports.
The cover of a booklet provided at an informational meeting on the Medicare drug prescription program in Sun City, Ariz. (Jeff Topping/Getty Images)
More on Health, America's Financial Crisis
TEXT OF STORY
BILL RADKE: Today we get an update on the two biggest drags on America's long-term budget -- Social Security and Medicare. Here's a preview from Marketplace's Jeremy Hobson reports.
JEREMY HOBSON: Every year at about this time, the trustees for Social Security and Medicare put the equivalent of an oil change sticker on the programs' windshields. Last year, trustees said the Social Security fund would start paying out more than it collects in 2017. They said the Medicare trust fund would start paying out more than it takes in within a year. Experts say today's report will show the situation is even worse.
The recession means fewer people working and therefore fewer people paying into the trust funds. While that's unlikely to mean immediate benefit cuts for recipients, it will mean more stress on an already gigantic budget deficit -- more than $1.8 trillion dollars this year.
I'm Jeremy Hobson for Marketplace.
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From Colchester, VT, 05/12/2009
Jeremy Hobson's story on social security projections had me screaming at the radio this morning -- never a pleasant way to wake-up.
Hobson's story was completely focused on the 2017 date and provided absolutely no context about accumulating social security surpluses that will continue through the 2040s and have been funded by employee FICA contributions.
The whole justification for a high FICA tax (which is a non-progressive kind of income tax because of the cap) is that the surpluses created by employee contributions will be used to fund the program. For anyone concerned about the mismatch in revenues and spending in government programs over the last 30 years or the next 35 years, social security is about the last place to look for a solution.
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