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The Looming Entitlement Crisis Threatens Taxpayers

The Washington Post reports today:

"The trustees who oversee Social Security and Medicare issued new warnings yesterday that the two programs are becoming unaffordable but pushed back slightly their predictions of when the crunch will hit.

“By 2017, Social Security will pay out more in benefits than it collects in taxes, the trustees said in their annual report. The program's trust fund is projected to be exhausted by 2041, one year later than estimated last year.”

And the National Taxpayers Union has this to say about the trustees’ report:

An expert in federal finance, (NTU President John) Berthoud noted that restoring balance to Medicare alone will require either an immediate 122 percent tax increase or a 51 percent reduction in benefits, both of which are politically infeasible. “Though the White House and Congress are controlled by different parties, Democrats and Republicans must start to grapple with the largest federal deficit threat this nation has seen. Balancing the budget and providing market-based reforms to curtail government debt are keys to turning this menace into a meaningful victory for taxpayers,” Berthoud noted.”

“Berthoud also observed that these entitlement shortfalls will occur much sooner than many believe. In the next nine years, federal Disability and Hospital Insurance will run a combined deficit of $141 billion, up more than $18 billion from last year’s projection. Just a few of the many NTU-backed initiatives for change include modestly restraining the growth of future benefits, preventing a cost explosion in the Medicare Part D prescription drug program, and helping Americans save more for their own retirement.

For those who believe a picture is worth a thousand words, the U.S. General Accounting Office has a graphic of the fiscal long-term challenge.

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