It’s not a surprise, exactly, but scary nonetheless: The recession is taking its toll on the Medicare and Social Security trust funds, which are careening even faster toward insolvency:
The new projection, in an annual report from the programs’ trustees, says that Medicare’s hospital insurance trust fund will be exhausted in 2017, just a year after President Obama would leave office if re-elected to a second term. Last year the trustees said they expected the fund to last until 2019.
The trustees also said that Social Security’s reserves now face depletion in 2037, four years sooner than the previous projection of 2041. The projections assume that there are no changes in current benefits, policies and tax rates.
UPDATE: The Washington Post notes:
The financial health of the Social Security system has eroded more sharply in the past year than at any time since the mid-1990s, according to a government forecast that ratchets up pressure on the Obama administration and Congress to stabilize the retirement system that keeps many older Americans out of poverty.
The report, issued yesterday by the trustees who monitor the government’s two main forms for help for the elderly, shows that Medicare has become more fragile as well and is at greater risk than Social Security of imminent fiscal collapse. Starting eight years from now, the report says, the health insurance program will be unable to pay all its hospital bills.
The findings put a stark new face on the toll the recession has taken on the two enormous entitlement programs. They also intensify a political debate, gathering strength among Democrats and Republicans, over how quickly President Obama should tackle Social Security when health-care reform is his administration’s most urgent domestic priority.