On Monday, March 19, the Social Security and Medicare Board of Trustees will release the annual report on the financial health and operations of Social Security and Medicare. The following statement is being released by the Campaign for America’s Future.
Available for comment:
Roger Hickey, Co-director of the Campaign for America’s Future
Hans Riemer, Director of the 2030 Center
Experts from other organizations
This statement from the Campaign for America’s Future is for immediate release:
For the past few years, the Trustees’ reports have shown a steady improvement in the long-term financial health of Social Security and Medicare. This has been due to economic growth and productivity growth that is higher than the actuaries have projected – and this year’s report will reflect that continuing trend. After the year of Social Security Trust Fund exhaustion, current payroll tax rates will be able to finance approximately 70% of Social Security benefits throughout the century.
But important new developments threaten progress on solvency. Decisions made this year about budget priorities, and particularly the Bush administration’s proposed tax cuts, will have a significant impact on our ability to meet future Social Security and Medicare obligations.
For example, the Trustees will show that Medicare faces more pressing problems than Social Security. And yet the Bush tax cuts and budget policy jeopardize Medicare financing. Those of us who want to strengthen Medicare benefits – and add a real prescription benefit to Medicare – know that will require additional general revenues. But the Bush tax cuts are so big they will starve Medicare of the funds necessary to preserve solvency and to finance an expanded drug benefit for elderly Americans. They may even reduce Medicare solvency by as much as 15 years, according to a report published last week by Families USA. That report was endorsed by Marilyn Moon, a former Public Trustee of the Social Security system.
Similarly, the enormous size of President Bush’s proposed tax cut would, if passed, reduce general revenues available for Social Security. Many analysts believe general revenues may be necessary to ensure payment of full Social Security benefits over the long term.
The Social Security and Medicare Trustees’ Report – written in part by members of President Bush’s own cabinet – directly contradicts the President’s claim that our important national needs have been met and that therefore we can afford a huge tax cut. Social Security and Medicare face long-term challenges, and the projected budget surpluses present us with an historic opportunity to meet the retirement income and health security needs of working families. The Bush tax cut will not leave an adequate amount of money to strengthen Social Security and Medicare.