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Bankruptcy of Social Security, Medicare delayedTough reforms are still needed, Clinton says
March 30, 1999 WASHINGTON (AllPolitics, March 30) -- The strong economy has again delayed the projected bankruptcy dates of the nation's top retirement programs. According to reports released by the Clinton Administration Tuesday, Medicare should have an extra seven years of solvency, while Social Security will have another two years. Despite the good news, President Bill Clinton cautioned that work must still be done to ensure the two programs' long-term financial health: "Social Security will run out money in 35 years, Medicare in 16 years. We cannot, we will not allow that to happen." This is the second consecutive year that stronger-than-expected economic growth has added new years of life to the strapped Social Security and Medicare trust funds. The new numbers now place the insolvency date for Medicare, the health insurance program for the elderly and disabled, at 2015. That is up from last year's estimate of 2008. Before that, Medicare was expected to run out of cash in 2001. The projected date that Social Security will run out of money has also been pushed up over the past two years. Last year's report extended that time frame from 2029 to 2032. This year the projection was bumped up to 2034. The future financial crisis of Social Security and Medicare -- expected to be brought on as the huge Baby Boom generation begins to retire -- has been a hot topic in Washington, with new reforms and more funding proposed to save the much-valued entitlement programs. Some experts speculate the good news will allow lawmakers to put off tough decisions on reforms. "This means we have more time to work together. More time to plan. More time to build on the amazing progress we've already made," said Health and Human Services Secretary Donna Shalala Tuesday in a statement. But Clinton said that work must be done now. "We should not be lulled into thinking that nothing more needs to be done. Because the improvements that we see today themselves did not happen by accident but instead came as a result of determined action to make sure that the problems were not allowed to get out of hand. "When I became president six years ago Medicare was actually projected to go bankrupt this year. We worked hard in 1993 and 1997 to make sure that didn't happen. Some of the actions we took at the time were not particularly popular. But we knew they had to be done," Clinton said. The Clinton Administration attributes the improvement in Medicare's finances to not just the growth economy but also to cost-cutting measures and its aggressive war on Medicare fraud and sloppy billing. "We vigorously managed Medicare," Shalala said. "I'm talking about management that is hands on; holds people accountable; introduces new systems; and responds to changing conditions." Retirement of the baby boomers -- people born from 1946 through 1964 -- is expected to nearly double the number of people receiving retirement benefits from the two programs. Social Security is the largest federal benefit program, sending checks to 44 million Americans. In addition to retirees, Social Security also makes payments to disabled people and to the survivors of workers who die young. Of the two retirement programs, Medicare is expected to run out of money first. It is already spending money from its trust fund to pay benefits. Lawmakers have yet to reach a consensus on how to shore up the ailing programs. Earlier this month the National Bipartisan Commission on the Future of Medicare failed to agree on a plan to salvage the health insurance program. President Bill Clinton is pushing a plan that would put a majority of the federal budget surplus -- over $70 billion this year and estimated to increase in future years -- toward the Social Security Trust fund and the Medicare Trust Fund. He again urged lawmakers to adopt his plan of setting aside 62 percent of the surplus for Social Security. And then "we then must go further with difficult but achievable reforms that put Social Security on a sound footing for 75 years," the president said. Republicans have committed themselves to setting aside money to shore up Social Security, but have not done the same for Medicare. The Associated Press contributed to this report. |
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MORE STORIES:Tuesday, March 30, 1999
• Bankruptcy of Social Security, Medicare delayed • Chief justice issues plea for funding • Internet campaigns want credit card donations to qualify for matching funds • Inside Politics Transcript: Michigan Rep. Stabenow talks about her decision to run for Senate • Republican Kasich hunts for cash • HillaryNo Web site opens • Delays affect government pension program | ||||||||||||||||||||||||||||
