According to the reports, issued by the trustees of the programs’ trust funds, the Medicare Hospital Insurance Trust Fund is projected to become insolvent by 2018, due largely to rapidly rising costs of American health care outstripping the payroll taxes that fund the program.

The report on Social Security indicates that this program will be able to pay out 100 percent of benefits until 2040, when the trustees predict the fund will be exhausted—a year earlier than previous projections. After that it would be able to cover 74 percent of promised benefits out of revenues until 2080, when it would decline to 70 percent.

“The systems are going broke,” Bush told a conference of the American Hospital Association. “It’s time to set aside politics and restructure Social Security and Medicare for generations to come.”

Later the same day, Treasury Secretary John Snow held a news conference on the reports, warning darkly that the new figures posed “a looming financial crisis for our nation.”

He was seconded by Medicare and Social Security trustee Thomas Saving, who declared, “Either government is going to have to be a lot smaller, or these programs are going to have to be dramatically changed.”

More
http://wsws.org/articles/2006/may2006/ssme-m03.shtml