Social Security and Medicare tomorrow

From Ncpa.org

President Obama begins his summit on fiscal responsibility today. Health care and soaring entitlement costs will certainly be discussed. Before we find a solution, we must recognize and agree on the problem, says John C. Goodman, President and CEO of the National Center for Policy Analysis (NCPA).

According to the Social Security and Medicare Trustees:

• The unfunded liability in Social Security and Medicare is more than $100 trillion dollars (that's trillion, not billion), or about 6 ½ time the size of the entire U.S. economy.
• That's the size of our commitments over and above expected premiums and dedicated taxes, measured in current dollars.
• Of this amount, Medicare accounts for about $85 trillion; additionally, Medicaid is almost as large as Medicare and two thirds of that is a federal obligation.

Furthermore, says Goodman, our options are very limited. Even if we decided to close down Social Security and Medicare tomorrow, collecting no more payroll taxes and allowing no more benefit accruals, we still owe about $52 trillion in benefits that have already been earned.

If we stay on the current course, these programs will crowd out every other federal program over time, says Goodman. Social Security and Medicare already have a combined cash flow deficit, which is being covered with general income tax dollars:

• By 2012, they will require one in every ten income tax dollars.
• By 2020, one in four.
• By 2030, one in two.