Social Security Insolvent Sooner Than Predicted, Trustees Say
By: Administrative Account | Source: CNSNews.com
March 24, 2005 6:09AM EST

By Melanie Hunter
CNSNews.com Deputy Managing Editor
March 23, 2005

(CNSNews.com) - The Social Security system will go bankrupt by 2041, a year earlier than estimated, trustees said Wednesday. But that's not all - Medicare will go broke by 2020.

The trustees also estimated that Social Security benefits paid to retirees will exceed tax income in 2017, not 2018 as was previously reported. Medicare benefits paid to the elderly have already exceeded payroll taxes in 2004.

"Today's report reinforces the sobering message that unless a solution is enacted soon, the Baby Boomers' retirements will bust Social Security," said Labor Secretary Elaine Chao in a statement after the trustees' meeting.

"As the President is urging and this report attests: we need a permanent and swift solution so that future generations can count on Social Security to be there for them too," Chao added.

"Just as current and near term retirees should have the peace of mind of knowing that their Social Security benefits they have earned will be paid to them, our children and grandchildren deserve the peace of mind of knowing they will have a safe and secure retirement system for the future," said House Speaker Dennis Hastert (R-Ill.).

"It's just too important for partisan games," Hastert added.

"Medicare on the other hand is in slightly better financial shape. The prescription drug benefit Congress passed in 2003 had certain cost containment measures that have helped restrain spending over time," Hastert said. "This first step was essential to ensuring seniors will have the care they need."

Hastert said despite measures taken to save Medicare, Congress cannot be "complacent."

"We know that as our population ages and therapeutic advances in medicine continue, we must ensure that Medicare is financially stable so that the program is able to provide the possible care to those that rely on this critical program," Hastert added.

The trustees include: Treasury Secretary John Snow, Labor Secretary Elaine Chao, Health and Human Services Secretary Michael Leavitt, Social Security Commissioner Jo Anne Barnhart and two members appointed by former President Clinton.

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