Medicare woes spur US budget talks
Source: Agencies |
May 15, 2011, Sunday
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Print Edition
Print Edition
TWO of the US government's most popular programs for the elderly will run out of money sooner than previously thought, according to a report on Friday that raises pressure for a long-term United States budget fix.
Trustees for the programs estimated the Medicare trust fund would be exhausted in 2024, not 2029 as estimated last year. The Social Security retirement program will run out of money a year earlier in 2036 and after that would have to reduce benefits.
The latest projections struck in the middle of an intense debate between the Obama administration and opposition Republicans about how to rein in the nation's runaway debt, set to hit the legal limit of US$14.3 trillion tomorrow.
Republicans have been pushing for much deeper spending cuts than the administration prefers as a price for agreeing to raise the debt limit.
The administration has warned of financial catastrophe if the ceiling on the debt is not raised. Republicans said the worsening finances of the two popular programs underscored the need for bold action on the budget.
"Today's report yet again highlights the urgent need to save and strengthen our critical health and retirement security programs," said House of Representatives Budget Committee Chairman Paul Ryan.
House of Representatives Speaker John Boehner, the top Republican in Congress, vowed retirees would be taken care of. "But we all know that if nothing is changed, senior benefits are gonna get cut. Why? Because they're unaffordable," Boehner told CBS' "Face the Nation."
So far, Social Security appears to be off the table. But Republicans in the House of Representatives want to overhaul the Medicare health care program for future retirees. Their proposal would give the elderly a federal subsidy to buy medical coverage from private insurers.
Republicans argue the change is needed because a recent analysis by the Congressional Budget Office shows the trust fund will be depleted in nine years.
The budget debate is deeply entwined with the struggle by the Obama administration to persuade lawmakers to hike the legal limit on the nation's debt. The current limit is expected to be hit tomorrow but the Treasury Department is taking action to ensure it can keep meeting the nation's obligation. But it has warned it will run out of maneuvering room by August 2.
(Reuters)
Trustees for the programs estimated the Medicare trust fund would be exhausted in 2024, not 2029 as estimated last year. The Social Security retirement program will run out of money a year earlier in 2036 and after that would have to reduce benefits.
The latest projections struck in the middle of an intense debate between the Obama administration and opposition Republicans about how to rein in the nation's runaway debt, set to hit the legal limit of US$14.3 trillion tomorrow.
Republicans have been pushing for much deeper spending cuts than the administration prefers as a price for agreeing to raise the debt limit.
The administration has warned of financial catastrophe if the ceiling on the debt is not raised. Republicans said the worsening finances of the two popular programs underscored the need for bold action on the budget.
"Today's report yet again highlights the urgent need to save and strengthen our critical health and retirement security programs," said House of Representatives Budget Committee Chairman Paul Ryan.
House of Representatives Speaker John Boehner, the top Republican in Congress, vowed retirees would be taken care of. "But we all know that if nothing is changed, senior benefits are gonna get cut. Why? Because they're unaffordable," Boehner told CBS' "Face the Nation."
So far, Social Security appears to be off the table. But Republicans in the House of Representatives want to overhaul the Medicare health care program for future retirees. Their proposal would give the elderly a federal subsidy to buy medical coverage from private insurers.
Republicans argue the change is needed because a recent analysis by the Congressional Budget Office shows the trust fund will be depleted in nine years.
The budget debate is deeply entwined with the struggle by the Obama administration to persuade lawmakers to hike the legal limit on the nation's debt. The current limit is expected to be hit tomorrow but the Treasury Department is taking action to ensure it can keep meeting the nation's obligation. But it has warned it will run out of maneuvering room by August 2.
(Reuters)
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