"The government says that a bad economy has shortened the lives of the trust funds that support the nation's two biggest benefit programs," The Associated Press writes.
The wire service says that the fund's trustees are reporting today that "the Medicare hospital insurance fund will now be exhausted in 2024, five years earlier than last year's estimate. ... [And] the Social Security trust fund will be exhausted in 2036, one year earlier than before."
As Reuters adds:
"The latest projections hit in the middle of an intense debate between the Obama administration and opposition Republicans about how to rein in the nation's runaway debt, set to hit the legal limit of $14.3 trillion on Monday. Whether the two costly entitlement programs should be on the table has been an intense subject of debate."
We'll have more on the report later this afternoon. And NPR's John Ydstie is reporting about it for All Things Considered.
Update at 3:25 p.m. ET: As John will report on All Things Considered, while the trustees' projections "show that Social Security will have the resources to pay full benefits through 2036," one year less than previously expected, "Social Security Commissioner Michael Astrue emphasizes that does not mean the system will be bankrupt" at that point.
Says Astrue: "What exhaustion in 2036 means is that we'll have money to pay a little bit more that three-quarter of benefits with no legislative changes. Now that's not good. We need to have Congress step up and make other changes so that that's not the outcome."
Medicare's problems are more urgent, John notes. He says that today's news "will likely only intensive the political wrangling over the health care program for seniors."
Update at 1:15 p.m. ET:The "2011 OASDI Trustees Report" and related materials are now posted here.
"The long-run financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected have adequate time to prepare. Earlier action will also afford elected officials with a greater opportunity to minimize adverse impacts on vulnerable populations, including lower-income workers and those who are already substantially dependent on program benefits.
"Both Social Security and Medicare, the two largest federal programs, face substantial cost growth in the upcoming decades due to factors that include population aging as well as the growth in expenditures per beneficiary. Through the mid-2030s, due to the large baby-boom generation entering retirement and lower-birth-rate generations entering employment, population aging is the largest single factor contributing to cost growth in the two programs. Thereafter, the continued rapid growth in health care cost per beneficiary becomes the larger factor."
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