Friday, May 19, 2006
This year, the combined Social Security/Medicare unfunded obligations reached $36.7 trillion on a 75-year horizon and $83.9 trillion on an infinite horizon. These figures were not included in handouts provided during a briefing on the report, according to John Goodman of the National Center for Policy Analysis. The Trustees also reported that in 2006, 12.3% of federal income tax revenues will be transferred to support Medicare; Social Security still has an excess amounting to 5.3% of income tax revenue. If present trends were to continue, Medicare alone would absorb 74.8% of income tax revenue by 2080, and Social Security 17.0%.
As part of the Medicare Modernization Act, the Trustees are required to compare overall projected Medicare expenditures with the program's "dedicated revenues." If the difference is projected to exceed 45% of the revenues within the first seven years of the projection period, it triggers a determination of "excess general revenue Medicare funding." A second such determination in 2007 would trigger a "Medicare funding warning."
This year is the first to trigger the determination. If it occurs again next year, Congress will be required to consider action on a expedited basis, but won't actually have to do anything.
And keep in mind we're doing a lot better than Europe with these numbers.