The forecasts for Social Security and Medicare trust funds have worsened this past year under the weight of the recession, according to two new government reports released today by the programs' trustees.
The trustees stated that the Social Security trust fund will run out by 2037, four years earlier than last year's report had predicted, while the Medicare hospital trust fund will be insolvent by 2017, two years earlier than projected last year.
Government officials, led by Treasury Secretary and managing trustee Tim Geithner, said the reports emphasized the need for President Obama's proposed healthcare reform.
"These reports underscore the urgency of action," Geithner said today.
"This report makes it clear -- reform can't wait," Secretary of Health and Human Services Kathleen Sebelius said, calling the news "a wake-up call".
Both entitlement programs are suffering due to rising unemployment, "a critical component" of today's revised predictions, according to Labor Secretary Hilda Solis.
With the newly-released jobs report for April, the nation's unemployment rate now sits at 8.9 percent, a 25-year high. Since the recession started in December 2007, 5.7 million jobs have been lost. Fewer people working means less money going into the trust funds.
The upcoming eligibility, beginning in 2011, of nearly 80 million retiring baby boomers only exacerbates the problems.
House Minority Leader John Boehner, noting the "demographic tsunami" of retiring workers, blasted the administration for increasing government spending, but not solving the entitlement problems.
"Our nation cannot afford to continue this reckless borrowing and spending spree," the Ohio Republican said in a statement. "While on the campaign trail last year, President Obama said, 'When you're in a hole, the first thing to do is stop digging.' I couldn't agree more, but his policies are putting our kids and grandkids deeper in that hole, and deeper into debt to China and the Middle East. Not only does the Democrats' budget double the national debt in five years and triple it in 10, but it does nothing to address the looming crisis in our entitlement programs."
Citing a "trillion-dollar entitlement crisis on our doorstep," Sen. Judd Gregg, the ranking member on the Senate Budget Committee, echoed Boehner's criticisms of the Democrats' spending.
"The demands of the retiring baby boomers and rapidly increasing health care costs will break the federal piggybank," the New Hampshire Republican said. "The Democratic majority's continuing inaction on this issue is inexcusable, especially given the reckless spending that they have in the works."
Gregg, along with committee chairman Sen. Kent Conrad, D-N.D., has proposed the creation of a bipartisan task force to tackle entitlement problems.
Conrad reiterated that call today, warning, "We cannot allow this issue to be kicked down the road any further."
Social Security Commissioner Michael Astrue, speaking alongside Geithner, Sebelius, and Solis at the Treasury Department, called for action, too, but said now was not time to panic, describing the reports as "some disappointing but not unexpected news."
"We should be neither casual nor hysterical about the revised insolvency dates," Astrue said. "The Social Security system is sound and will weather this recession."