Caught in the sluggish recovery from the last recession, Social Security and Medicare face an increasingly dismal fiscal future, the federal government reported Friday in its annual review of the two mammoth entitlement programs.
Medicare, which now provides health insurance to some 47 million elderly and disabled Americans, could begin running a deficit in 2024, five years earlier than projected last year.
And Social Security, which last year began paying out more in benefits than it collected in taxes, now faces insolvency in 2036, compared to 2037 in last year’s projections.
Over the years, the Social Security and Medicare trustees have produced widely varying assessments of the financial health of the two programs, as the nation’s economy has moved through periods of growth and stagnation.
But the latest estimates by the trustees are expected to intensify pressure on both parties in Washington to move forcefully to shore up the two programs.
"We should not wait for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees," said Treasury Secretary Timothy Geithner, who chairs the board of trustees.
"Larger, more difficult adjustments will be necessary if we delay reform. And by making reforms soon that are phased in over time, we will help reduce uncertainty about future benefits."
Most federal budget experts believe the most pressing issue is the rising cost of providing medical coverage to the nation’s senior citizens, which makes the threat to Medicare far more serious and complex.