Medicare and Social Security “Trust Funds” Deteriorated

image The Obama administration reported Tuesday that the financial condition of the two largest federal benefit programs, Medicare and Social Security, had deteriorated, in part because of the recession.

The administration said the Medicare fund is expected to run out of money in 2017, two years sooner than projected last year.  The Social Security “trust fund” will be exhausted in 2037, four years earlier than it predicted. (see graph below)

imageLawmakers have long said that they would never allow Medicare’s trust fund to run out of money, but with numbers like this it’s hard to believe that they can do anything to stop it from happening.

Advertisement

The projected date of insolvency, a widely used measure of the benefit programs’ financial health, shows the immense difficulties Mr. Obama and Congress will face in trying to shore them up while also extending health coverage to millions of Americans.  The fact that 5.7 million jobs have been lost since the recession began isn’t helping since with fewer people working, the government collects less in payroll taxes,  a major source of financing for Medicare and Social Security. 

The Treasury secretary, Timothy F. Geithner, said the only way to keep Medicare solvent was to “control runaway growth in both public and private health care expenditures.” And he said Mr. Obama intended to do that as part of his plan to guarantee access to health insurance for all Americans.

Recession Drains Social Security and Medicare

Join the Conversation (0)

see all

This is a professional community. Please use discretion when posting a comment.

  • We all have good reason to worry. There is no room for trust in “TrustFund” as the funds are continuously misappropriated. The MediCare system is fundamentally bankrupt as it is. The administration is busy borrowing and printing money to purchase control of private industries(AIG, GM, BofA, et al). Soon it will be necessary to borrow more to fulfill MediCare and SS obligations only to find that there are no takers. What then? Seniors aren’t stupid, they know how thin the ice is. Like many of us they are incapable of conceiving the depth of deceit of the federal government and if we can grasp that, what to do about it. After all, the money is long spent well into the future.

  • How sad to read the results of mismanaged enterprises. Now we have a leader that is like FDR and Jimmie Carter, but on steroids. Not that we have had mostly great leaders for the past 100 years. Both sides have been for the most part guilty of promising more than they can provide.

    Sow to the wind with deficit spending and reap the whirlwind in social unrest in the country.

    Get rid of deficit spending and printing by the federal government and the most insidious tax goes away. What is that? INFLATION. This is what hurts the most vulnerable of our country. Those that are not able to increase their income to keep pace. Who are they? The retired and the children.

    Read the history of Rome, Germany, Argentina, and others and you will find that we are following in their footsteps.

    This is why we even have reverse mortgages. Because of inflation which is only caused by the central government devaluing the individual unit of the paper they print. Thus forcing us to NEED a reverse mortgage and not be able to leave the equity of our home to our children and grandchildren.

  • I already have had at least one borrower who was worrying himself into a heart attack over foreclosure before he got his reverse mortgage. When seniors feel threatened and unsure of their future, they require a lot more handholding. I agree with The Critic. Let’s keep use of these facts to a minimum in our sales presentations. It could be counter-productive.

  • So what am I going to retire on? I still have 30 plus working years left. So I guess I will need to be an agressive investor in a secured commodity. There is only one sure thing in this life for me to invest in. God!

  • Max:
    No one is getting out of here alive, and no one is taking anything with them when they go. Now, we are to owe no one except “brotherly love” but when we vote in our leaders that think only of their “career” then we find ourselves getting what we voted for.

    So, when we write a reverse mortgage, we are indeed helping the senior to cope with the situation. I agree with the critic and we need not share this information.

    geo_taylor@comcast.net

  • Good evening,

    What I can’t understand is why the senior citizen population is always the segment that gets the shaft.

    Why can’t our Government just print more money for Medicare and Social Security? All they need to do is call it a “Stimulus Package”. They should just pass a new Trillion dollar “Stimulus Bill” like they do everything else. Get the printing presses running and print the Trillion dollars then put it in both Medicare and Social Security. Now we can have a bunch of years added on to each.

    Now that I think about it, the only problem is, our government would have more money available to them to borrow and put it in to something else. You know, borrow from Medicare and Social Security to pay for other things. This is what they always have done, so why not do it again?

    Do you think our Government has had a plan to do away with us seniors by a certain date in time? How they forget, so many seniors of today fought in battles and fought for our freedom, only to be forgotten and left to fade away. So sad, so wrong and so contrary to our forefathers believes and that at the end of wold war II.

    Good night all,

    John A. Smaldone

  • It was bound to happen when a country is constantly at war within itself and both parties are a bunch of corrupt, untrustworthy, greedy and incompetent fools.

    Anyone who cannot see how our own government and the way it has been run for decades is not the problem should really, well, I guess I really don’t even know what advise to give them.

    Neither party is right, has been right or will ever be right. Capatilism is by far the greatest system on earth, but it cannot be sustained with such corruption and incompetence at the wheel.

    I wish and hope all of the American CITIZENS, SOLDIERS and families the best of luck. The only CHANGE that needs to happen is “WE THE PEOPLE” need to start standing up for OUR rights and not be so concerned about how OTHERS feel about how this great country was built. It is sad to see the fall. Very sad indeed.

  • Michael,

    I commend you. Your comments were very well put. If WE THE PEOPLE ever would have the guts to stand up for our rights, if we would? Then and only then we might stand a chance

    You are right, it is sad to see what is happening to our great country. This is a country I love and served proudly for. I still say and will always say as long as I live, “God Bless America”, and I could care less if anyone does not like it!

    John A. Smaldone

  • I agree with the Critic but I would take it one step further. (forget about sparingly) We should not use this data at all for marketing purposes. I would call it fear mongering.

    The seniors are well aware of how our past and present administrations have squandered their money on wasteful programs and put the social security system on the brink of bankruptcy. Just look at the last stimulus package and all the pork. Millions spent on getting rid of pig smell in Iowa as a small but ironic example. They should have used it to get rid of the pig smell in Washington. It would have been money well spent.

string(98) "https://reversemortgagedaily.com/2009/05/14/medicare-and-social-security-trust-funds-deteriorated/"

Share your opinion