Medicare And Social Security In Trouble

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WASHINGTON, D.C.: Just as the two presidential candidates are vying to promise the better tax cut this election year, the Medicare and Social Security time bombs are about to explode. Trustees of the Medicare system will report Wednesday that the program's hospital fund is tumbling into insolvency faster than previously expected. According to the Congressional Budget Office, the Medicare trustees, who reported a year ago that the fund would go broke in the year 2002, now will state that it will run out of money a year earlier, in 2001. Anonymous White House sources said the trustees will also report that Social Security is now expected to go bust in 2029, instead of 2030. The Social Security problem, however, is less urgent, in part because it is still taking in more money than it is paying out. The Medicare hospital fund, known as Medicare Part A, has been running a loss since last year. Dick Davidson, the president of the American Hospital Association, called Tuesday for an independent citizens commission to hammer out a solution to the crisis, accusing both parties of ignoring the problem for political reasons even as "the situation gets worse and worse."

Medicare Part A is funded through payroll taxes. Though its $134.3 surplus will absorb its steady losses for a few more years, the program suffers from a fundamental economic imbalance: as the leaders of both political parties well know, fewer and fewer workers are supporting more and more elderly Americans, even as health-care costs are rising. Faced with the impending bankruptcy of the Medicare system, however, Republicans and Democrats have consistently blocked one another's solutions. While Republicans cried foul when President Clinton proposed Medicare changes as part of his vast health reform proposal two years ago, Democrats demonized GOP leaders when they came back with a very similar Medicare solution last year, telling voters that the Republicans were trying to deny needed benefits to their elderly parents. Referring to the Medicare report on Tuesday, House Speaker Newt Gingrich said: "If the President will sit down and say, 'All right, we can find a compromise,' I think sometime this summer we could pass a Medicare bill." But House Democratic Leader Dick Gephardt renewed accusations that Republicans only want "to raid Medicare ... to lavish more tax breaks on the very people who don't need them." Given the timing, the dire news from Medicare's trustees may well play into Republican hands, since Democrats will no longer find it so easy in a presidential election year to imply that only Republican callousness stands between America's elderly and a fully-funded Medicare system. -->