August 05, 2011

Crapo: Entitlement Crisis Looms

Congress needs to face crisis or future generations will face bankrupt system

Washington, DC - Reports released today by the Social Security and Medicare Trustees demonstrate just how financially tenuous the two programs are, said Idaho Senator Mike Crapo. Social Security payments will exceed receipts for the first time since 1983, partly because of the recession, but also because nothing has been done to shore up the program, which benefits 53 million Americans.

The annual reports indicate that both Social Security and Medicare currently have very serious cash flow problems. The Social Security Trustees estimate that program costs will exceed revenues this year for the first time since the early 1980s and will permanently exceed tax revenues in just five years, in 2015. Social Security is expected to run a deficit of $41 billion. The Medicare program is already operating under a cash shortfall, which began in 2008. Although the annual report indicates that the Medicate hospital trust fund will remain solvent through 2029, Rick Foster, the Chief Actuary of the Centers for Medicare and Medicaid Services (CMS) cautions that these anticipated savings "may be unrealistic". Foster notes that many of the Medicare cuts contained in the health care reform legislation "may not be viable in the long range."

Crapo, who serves on both the Senate Budget Committee the Senate Finance Committee and is a member of the National Fiscal Commission on Fiscal Responsibility and Reform, said, "We keep pushing the ball farther and farther back on resolving these long-standing issues with entitlement spending. Social Security and Medicare programs are important, vital lifelines for many Idahoans, and it is far past the time for Congress to seriously address the financial difficulties faced by both programs. With a current federal debt of $13 trillion and projected deficits well over $1 trillion for the next ten years, Congress cannot afford to keep looking the other way and using budget gimmicks and promises from future Congresses to ignore the problems. Close to 100 million Americans depend on these two programs to maintain their health and homes, and the out-of-control federal spending pushes those people into further jeopardy every year that Congress fails to act."