From The Mailbag: Social Security And Medicare Solvency
Guest column submitted by U.S. Senator Mike Crapo
As active participants in the decisions made in Congress, Idahoans contact me with valuable input about the issues our country faces. Realizing that many may not have the chance to contact me, I post the top five issues of concern from Idahoans and my responses on my website. Idahoans frequently contact me to share their experiences with Medicare and Social Security. The following is my response:
Medicare and Social Security are both in need of comprehensive reforms to better serve the people of Idaho. The Medicare program must undergo holistic, systemic changes in order to protect the current and future enrollees. The Medicare Trustees report the program faces an unfunded liability of nearly $25 trillion, and the program is currently on track to be insolvent in 2030, if action is not taken to reform the program.
In recent years, over half of the $1 trillion that the federal government spent on health care went toward Medicare. These numbers are expected to dramatically increase within the next 10 years. While Medicare is essential to seniors on fixed incomes, it is one of the main contributors to the national deficit, and suffers from significant inefficiencies. To ensure that a sustainable and quality Medicare program will be available to America's aging population, we must address its cost burden now.
Social Security has been an important, successful program for over sixty-five years, providing benefits to millions of senior citizens and the disabled. However, I also recognize that Social Security must remain a system on which our children and grandchildren can depend.
In recent years, there has been widespread acknowledgement that the government must address the long-term health of the Social Security system. Accordingly, a national discussion has evolved regarding the future of Social Security. Our first and foremost concern is to maintain the promises made to protect current recipients, while strengthening the system to guarantee benefits for future retirees.
The seeds for the current debate date back to the mid-1970s when it became apparent that changing economic and demographic circumstances would strain the financial condition of the existing system. In 1950, 16 workers paid into the system for every one individual receiving benefits. When our children retire, the ratio will fall to just two workers per beneficiary. In addition, life expectancy has increased. While this is good news, the combination of falling birthrates, increasing life expectancies, and retiring Baby Boomers places tremendous pressure on the Social Security system.
In 2010, Social Security spending exceeded the program's non-interest income for the first time since 1983. In less than ten years from now, spending on Social Security benefits will exceed interest earnings, and trust fund reserves are projected to be exhausted by 2033. After that point, seniors will only be able to receive three-quarters of their scheduled benefits.
Even more pressing, the Disability Insurance Fund will be insolvent by the end of 2016, without necessary reforms. If we wait to address the problem at that point, the only solutions will be substantial tax increases and massive new borrowing or large cuts in Social Security benefits or other government programs. It would be easy to turn away and leave the tough decisions to others, but we owe it to current and future workers to address the problem now. In fact, according to the Social Security Administration, each year of inaction increases the bill to the next generation by more than $600 billion.
I am committed to protecting the Social Security benefits for all of our current seniors, and am working hard to make the program solvent to assure these benefits will also be available to future retirees.
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