Friday's that the outlook for both the Social Security and Medicare trust funds had worsened since last year, that those funds are are likely to run out of money sooner than previously predicted, allowed the Obama Administration and House Republicans to declare the rightness of their approaches to shoring up the programs.
According to the trustees' reports, Medicare's hospital insurance trust fund will be exhausted by 2024, five years sooner than was earlier predicted. Social Security would use up its trust fund in 2036, a year sooner than was forecast last year.
Both trust funds were hurt by the recession which reduced the tax receipts that replenish them.
Singling out the Medicare funding report, Treasury Secretary Tim Geithner said it was vindication of changes included in the Affordable Care Act aimed at reducing the program's costs.
GEITHNER: ... The Medicare report illustrates once again theimportance of the reforms in the Affordable Care Act, which will significantly strengthen Medicare's finances and extend the life of the Medicare Trust Fund.
The trustees' reports underscore the need to act sooner rather
than later to make reforms to these entitlement programs. Last year, of course, the president and Congress took a timely first step by enacting the most significant entitlement reforms in decades.
But we have to go beyond the Affordable Care Act and identify additional reforms. Americans are living longer, and health care costs are continuing to rise. And if we do not do more to contain the rate of growth in health care costs, then our commitments will become unsustainable.
The new health law placed new limits on what Medicare will pay providers. It also cuts spending on the Medicare Advantage program which helps seniors pay premiums for private health insurance.
Speaker John Boehner, not surprisingly had a different take. The reports lent support, he said, to the House GOP's proposal to transform Medicare from a single payer program to one in which the government would provide seniors with money they could use to purchase private insurance:
BOEHNER: For decades, politicians in Washington, DC have looked up at the size and scale of the fiscal challenges facing our country, particularly in Medicare, and chosen to kick the can down the road. Today's trustees report is another reminder that we've run out of road. With tens of millions of Baby Boomers beginning to retire, this is the moment to act. The time is now.
We've outlined a proposal that would mean no changes for anyone age 55 and up, while making reforms to ensure that Medicare is around when younger Americans and future generations are ready to retire. The biggest threat Medicare faces right now is the status quo. The trustees' report makes it clear that if we do nothing, Medicare will not be able to pay promised benefits to American seniors – and sooner than we thought. That is the real challenge our nation faces. It's time for the grown-ups in the room to stand and be counted. We have laid out a plan to address the threat of Medicare insolvency. We're still waiting to see one from President Obama and the Democrats who run Washington.
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