Earlier today, the trustees of Social Security and Medicare issued their annual report, warning again of the programs’ major financial shortfalls.
In response to this report, House Budget Committee Chairman Paul Ryan (WI-01) issued the following statement:
“Today’s report yet again highlights the urgent need to save and strengthen our critical health and retirement security programs. Rather than allow opponents of reform to allow Medicare to collapse, the House-passed budget saves Medicare, making no changes for those 55 and older and offering future generations a strengthened, personalized Medicare program they can count on. It also stops the raid on the Medicare trust funds – ensuring that Medicare savings go toward saving Medicare, not creating a brand new entitlement. We must also work together to advance bipartisan solutions to strengthen Social Security, which is what our budget requires.”
“By contrast, Senate Democrats have failed to produce a budget yet. President Obama’s budget, with trillions in new spending, higher taxes, and more borrowing, is woefully inadequate to today’s challenges and fails to deliver needed security for America’s seniors.”
“The Trustees Report makes it clear – the time for action is now. Leadership is required from both sides to ensure that Medicare and Social Security are saved for current seniors and strengthened to meet the needs of future generations.”
More from the Trustees Report:
The Trustees now project that Social Security has entered into a period of permanent cash deficits. That means that to pay full Social Security benefits, the government must cut spending, raise taxes, or, more realistically, borrow more money to finance pension payments.
The 75-year actuarial imbalance has increased to 2.22 percent of payroll (up from 1.92 percent last year).
Social Security faces a $6.5 trillion unfunded liability (up from $5.4 trillion last year.)
The Social Security Trust Funds are expected to go insolvent in 2036, meaning that certain birth cohorts above the age of 55 can expect to see a 23 percent cut in their benefits.
The Medicare Part A Trust Fund is expected to be exhausted in 2024, a full five years ahead of the date estimated in last year’s report.
Despite the President’s health care law, Medicare physician payments must be cut by 29.4 percent on January 1, 2012. The report calls this an “implausible expectation.”