New figures released by the White House on Monday raised the projected federal deficit for this year to $1.84 trillion, up 5 percent from February's estimate, primarily from the recession reducing tax receipts and from the cost of the recession.
While that is certainly disturbing news, as the Obama administration has yet to offer plans on how we'll ever dig ourselves out a deep hole, the more disturbing news is how the recession is affecting Social Security and Medicare.
As the recession roars on, insolvency for the federal government's two entitlement programs is accelerating, the Associated Press reported Tuesday. As a result, Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the trust fund will evaporate by 2037, four years sooner.
Medicare will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees for the program report that the Medicare fund will be depleted by 2017, two years earlier than the date projected last year.
Actually, the system's solvency is even worse than that. The trust funds aren't safe money in a bank, but rather paper documents in a file cabinet in West Virginia. The reserves are bonds backed by "the full faith and credit" of the government, but the assets have long been spent on other government programs. To redeem the bonds, the government would have to borrow, worsening the already skyrocketing national debt.
Social Security and Medicare reform have long been avoided by Congress. Former President George W. Bush made it a signature project but failed to gain traction on the issue.
Limiting benefits to either program draws quick and nearly deadly political spears from a public that now counts on both programs for elder income and health care. Originally intended to supplement pension and health care plans, Social Security and Medicare are all many people have.
And Medicare could get worse unless health care costs are curbed. Some health care reform plans call for a single-payer system, perhaps using Medicare. But to load up that program without adequately funding it could bankrupt the program.
The Obama administration has yet to lay out clear plans for Social Security and Medicare reform, but we realize President Barack Obama's plate has been full since taking office. But we can no longer wait.
Congress must deal with Social Security and Medicare soon, while changes can still be made that can be effectual without seriously restricting the benefits our elders now receive.