The solvency of Social Security and Medicare is a highly discussed topic right now and is a issue that will affect you and your family.  Henry Aaron of the Brookings Institute weighs in with his thoughts on the subject.  Lets hear from you.  What are your ideas/concerns.  TheKeysPlease would like to hear from you.

Monday September 12, 2011

Q&A WITH HENRY AARON

Social Security and Medicare Solvency

Social Security, Social Security Administration, Medicare, Retirement, U.S. Department of Health and Human Services

Henry J. Aaron, Senior Fellow, Economic Studies

May 14, 2009

The latest report of the solvency of the Social Security and Medicare trust funds reveals that these entitlement programs will likely run out of money sooner than expected. Senior Fellow Henry Aaron assesses the future of these two programs.

“I think the Social Security trust funds report should be interpreted as worse news than last year, but actually better than the news that has been on the average for about the last 15 years. The Actuary’s projections have been pretty much constant over that period. The system has enough money until sometime late in the 2030s or early 2040s. It does face a long term deficit, and the sooner we deal with that problem the better, but there is really no cause for hand ringing that the sky is falling. There is a steady warning that it is time for Congress to face this problem and deal with it. Furthermore it’s a relatively easy problem to deal with. Small adjustments in revenues or in benefits would be sufficient to put the system on a steady financial course for the indefinite future.”

“…In the case of Medicare the prospects as indicated by the trust funds reports this week are far more serious than in the case of Social Security. There are smaller reserves for hospital insurance, so the system is projected to exhaust those reserves much sooner. Furthermore, costs are projected to increase not only because the baby boomers are going to retire, which also affects Social Security, but in addition because the per capita costs of health care spending are growing faster than incomes, and that means you got a double whammy. Big changes are going to be necessary, probably mostly on the revenue side, but some in the form of economies and expenditures, in order to assure that the Medicare system is in balance. The key point here is that in order to do those things with in Medicare the changes almost certainly will have to be and should be embedded in overall health system reform. That is the reason my view why President Obama and leading administration spokespersons have been emphasizing that health reform is budget reform for the federal government.”

Research and Commentary

HEALTH CARE

Budget Crisis, Entitlement Crisis, Health Care Financing Problem—Which Is It?Fall 2007

There is No Entitlement CrisisFebruary 23, 2009

Reforming Medicare: Options, Tradeoffs, and OpportunitiesWednesday, July 30, 2008
10:00 AM to 12:00 PM
Washington, DC

FISCAL POLICY

How To Take Back Our Fiscal FutureMonday, March 31, 2008
10:30 AM to 12:00 PM
Washington, DC

Budget Deficit and Entitlements: The Grand DelusionOctober 15, 2003

A Balanced Approach to Restoring Fiscal Responsibility July 2008

FEDERAL BUDGET AND NATIONAL DEBT

A Budget We Can Believe InJanuary 27, 2009