www.chicagotribune.com/news/nationworld/chi-social-securitymar26,1,6982890.story
decrease text size WASHINGTON -- Trustees for the government's two biggest benefit programs warned that Social Security and Medicare are facing "enormous challenges," with the threat to Medicare's solvency far more severe. The trustees, issuing their once-a-year analysis, said the resources in the Social Security trust fund will be depleted by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019. Both those dates were the same as in last year's report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes. For Medicare, that threshold is projected to be reached this year;
story%3Flast_modified%3D3%2F26%2F08%201%3A24%3A27 Both programs are expected to come under increasing pressure as 78 million Baby Boomers start retiring and drawing benefits. "The financial difficulties facing Social Security and Medicare pose enormous challenges," the trustees said in their report. "The sooner these challenges are addressed, the more varied and less disruptive their solutions can be." Treasury Secretary Henry Paulson, one of the trustees, warned of a fiscal train wreck unless something is done. "Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America's future prosperity," he said.
President Bush, who wanted to make overhauling Social Security a top priority in his second term, tapped Paulson to lead that effort. However, Paulson has been unable to forge a consensus with Democrats, who took control of Congress in 2006. Democrats contend that Bush lost valuable time after his 2004 re-election pushing a plan to allow younger workers to direct their payroll tax contributions into private accounts, an idea that went nowhere in Congress.
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