Social Security heading for insolvency even faster

Source: AP-Excite

By STEPHEN OHLEMACHER and RICARDO ALONSO-ZALDIVAR

WASHINGTON (AP) - Social Security is rushing even faster toward insolvency, driven by retiring baby boomers, a weak economy and politicians' reluctance to take painful action to fix the huge retirement and disability program.

The trust funds that support Social Security will run dry in 2033 - three years earlier than previously projected - the government said Monday.

There was no change in the year that Medicare's hospital insurance fund is projected to run out of money. It's still 2024. The program's trustees, however, said the pace of Medicare spending continues to accelerate. Congress enacted a 2 percent cut for Medicare last year, and that is the main reason the trust fund exhaustion date did not advance.

The trustees who oversee both programs say high energy prices are suppressing workers' wages, a trend they see continuing. They also expect people to work fewer hours than previously projected, even after the economy recovers. Both trends would lead to lower payroll tax receipts, which support both programs.

Read more: http://apnews.excite.com/article/20120423/D9UASMEO2.html

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Treasury Secretary Timothy Geithner listens during a news conference on the Social Security and Medicare Trustees Reports, Monday, April 23, 2012, at the Treasury Department in Washington. Trustees update forecasts for the government's two largest benefit programs, which are laboring under the weight of retiring baby boomers, revenue shortages and politicians' reluctance to take painful action to fix them. (AP Photo/Susan Walsh)