Trustees Extend By A Year The Depletion Dates For Social Security
Monday, April 23rd 2007, 7:22 am
By: News On 6
WASHINGTON (AP) _ The trust fund for Social Security will be exhausted in 2041 and the Medicare trust fund in 2019, the trustees of the two programs said Monday. Both dates were one year later than previously estimated.
In their annual report on the financial health of the government's two biggest benefit programs, the trustees said that slight reductions in projected benefits and slightly higher tax collections had extended the dates that the trust funds are projected to be depleted.
However, the trustees said both programs continue to face serious financial problems with the pending retirement of 78 million baby boomers. The report for the first timed triggered a Medicare funding warning that will require President Bush to submit to Congress next year proposals for trimming Medicare costs.
The Medicare funding warning is triggered any time two consecutive trustees reports conclude that the amount of general revenue needed to finance Medicare will top 45 percent of the program's outlays. The trustees first made that determination last year.
It will require Bush to propose remedial action early next year. While Congress must consider the proposals, it is not required to act on them.
Lobbying groups for senior citizens have decried the warning mechanism, which was added to Medicare with passage of the prescription drug benefit in 2003.
They contend that it is no more harmful for Medicare to receive more than 45 percent of its funding from general revenue than for other government programs to receive 100 percent funding from general revenue. The other sources of Medicare funding are payroll taxes and insurance premiums.
Bush once vowed to make overhaul of Social Security the top domestic priority of his second term. However, the proposal he put forward in 2005 to deal with the funding shortfall by creating personal savings accounts for younger workers went nowhere in Congress.