Crutsinger, Martin, AP Economics Writer. "Social Security, Medicare Trust Funds Sink".Http://news.yahoo.com/s/ap/social_security;_ylt=AnVFL3PRI0hn2_h0PUu z3Jes0NUE;_ylu... 5/1/06
In Washington, the trustees for the government's two benefit programs said Monday that the trust fund for social security will be depleted in 2040, a year earlier than expected, while the Medicare will exhaust its funds just 12 years from now. The Medicare problems are shown as far more serous financially because of the skyrocketing costs for health care. Trustees that are head of the social security administration include three members of the President Bush's Cabinet, painted a sober assessment of the health programs in advance of the looming retirement of 78 million baby boomers. The trust funds contain the same as the governments way of "IOU's" to raise the actual cash to meet the obligations of the nation. Borrowing more money from the public by issuing marketable Treasury securities, raise taxes or cut spending in other programs.
Last year, Bush tried to introduce a private investment account for younger workers but it didn't go anywhere with congress. Democrats thought the program was a hidden effort to cut future benefits. Treasury Secretary, John Snow, said the new report depicted "a looming fiscal crisis when the baby boom generation moves into retirement" and he urges Congress to move forward with this year's State of the Union address. But Democrats from the congress charged that the administration was using trustees reports to try and create an air of crisis to make radical changes to the two benefit programs.
Both programs face financing issues sooner at the point that the amount paid out each year exceed the amount the government collects to fund them. This happened for Medicare in the year 2004. Social Security will pass more in benefits than it takes in will occur in 2017, the...